Cryptocurrencies rebounded on Wednesday, led by gains in the Bitcoin and Ethereum markets as traders hoped for additional stimulus packages in the US.
The cost of buying a Bitcoin was over $ 36,000, while Ethereum’s native token Ether hit a new record high at $ 1,574. Other large-cap tokens, including Polkadots DOT, Litecoin’s LTC, and Chainlink’s LINK, also rose in the 7 to 9 percent range, adding around $ 19 billion to the overall valuation of the crypto market.
Bitcoin hits a new weekly high of $ 36,888. Source: BTCUSD on TradingView.com Bitcoin hits new weekly high of $ 36,888. Source: BTCUSD on TradingView.com
Bitcoin bubble concerns easing
Some of the gains in the top crypto assets showed against easing concerns over stretched valuations in the US stock market. During the coronavirus pandemic, grand winners including Alphabet and Amazon reported record sales in their latest earnings reports.
On Wednesday, Spotify Technology and Apollo Global Management will release their results before the opening bell. Qualcomm and Costco Wholesale would report the same thing after the closing bell.
Bitcoin, also a pandemic winner, tends to be exposed to risks from stock market bubbles. In March, a crash in the global financial market forced traders to cover their margin calls by selling any profitable assets to seek cash security. Bitcoin thus set itself apart by a massive 60 percent in just two days.
So it seems that positive sentiment in the stock markets has given Bitcoin a bullish setback. In the meantime, Ethereum, which continues to correlate positively with Bitcoin, assumes that it is following the trend of the king cryptocurrency to reach further highs.
The Ethereum price is reaching an all-time high. Source: ETHUSD on TradingView.comEthereum price hits all-time high. Source: ETHUSD on TradingView.com
Bitcoin traders are also monitoring talks between lawmakers over another round of coronavirus stimulus measures. President Joe Biden’s administration has pledged support for $ 1.9 trillion in aid. Meanwhile, Republicans want to cap the incentive to nearly $ 618 billion.
The Democrats are now planning to push their own economic agreement, as they control 50 percent of the Senate and assume that Vice President Kamala Harris’s tiebreaker vote will be in their favor.
“The bigger focus is on timing,” said Seema Shah, chief strategist at Principal Global Advisors. “There is a general view that the stimulus will be considerable; The important question is whether it will come soon enough because the US economy needs it now. “
As usual, the prospect of additional stimulus could lower the US dollar despite recent attempts at recovery. This, in turn, could allow cryptocurrencies like Bitcoin and Ethereum to maintain their medium-term bullish bias.