Cryptocurrencies rose Wednesday as investors continued to grapple with the market’s summer doldrums and looked ahead to the Federal Reserve’s annual meeting in Jackson Hole, Wyoming, on Friday.
Bitcoin rose more than 2% to $26,517.09. The cryptocurrency has been hovering around the $26,000 level since breaking below it suddenly late last week and posted its worst week since May. Ether added more than 3% to trade at $1,684.20.
Binance coin, the third-largest crypto asset by market cap excluding stablecoins, gained 4%. Tokens tied to ethereum competitors were up as well — Solana’s coin jumped 6%, while Cardano’s gained 5.5% and Polygon’s rose 4%.
The crypto market move higher coincided with gains in the major stock averages. Crypto assets spiked more sharply around noon ET, though it’s unclear what exactly could have caused the sharp move.
“You’re probably going to see some wild moves up and down as bitcoin tries to march back to $30,000,” said Callie Cox, analyst at investing firm eToro. “Add in summer trading volumes, and you have a recipe for day-to-day volatility. Bitcoin prices have been more resilient today on hopes for lower rates, and a few hours of stable trading could have been enough to bring buyers back in.”
The market has also been concerned in recent weeks that Fed Chair Jerome Powell could deliver a more hawkish speech about rate hikes this week at the central bank’s meeting in Jackson Hole, which some say could be manifesting now in a sell-the-rumor, buy-the-news moment.
Crypto has been suffering since the spring from low liquidity and thin trading volumes, which has exacerbated moves on both the upside and the downside. This has been especially true throughout the seasonally sleepy month of August.
“The correlation between equity indices and bitcoin has declined to near zero in 2023,” said Sam Callahan, lead analyst at Swan Bitcoin. ”Bitcoin’s price appears to be bouncing after a sharp sell off last week that was exacerbated by over $2.7 billion worth of liquidations of leveraged positions.”