What started as a slow morning in the US crypto markets took a quick turn, with bitcoin. retake the $94,000 level.
Sitting just above $90,000 earlier today, the largest cryptocurrency returned to $94,000 minutes after 16:00 UTC, gaining over $3,000 in less than an hour and up 4% in the last 24 hours.
Ethereum Ether jumped 5% during the same period, while the native tokens of and chain link climbed even more.
The action slowed as silver soared to new records above $60 an ounce.
While broader equity markets remained stable, crypto stocks followed Bitcoin’s advance. Digital asset investment firm Galaxy (GLXY) and Bitcoin miner CleanSpark (CLSK) led with gains of more than 10%, while Coinbase (COIN), Strategy (MSTR) and BitMine (BMNR) rose 4-6%.
Although there was no obvious catalyst for the rapid rise, BTC mostly sold off for weeks alongside the opening of US markets. The current trend change could indicate seller burnout.
Vetle Lunde, senior analyst at K33 Research, highlighted “deeply defensive” positioning in crypto derivatives markets, with investors concerned about further weakness and crowded positioning that could contribute to a rapid rollback.
Further signs of bear market capitulation also emerged on Tuesday, with Standard Chartered bull Geoff Kendrick reducing his outlook for the price of Bitcoin for the next few years.
Coinbase’s Bitcoin premium, which shows the difference in BTC spot prices on US exchange Coinbase and offshore exchange Binance, has also turned positive in recent days, signaling a return of demand from US investors.
Taking a closer look at the market structure, the daily rise in BTC prices has outpaced the rise in open interest in the derivatives market, suggesting that spot demand is fueling the rally rather than leverage.
The Federal Reserve is expected to lower its benchmark interest rates by 25 basis points at its two-day meeting ending Wednesday. Although the rate cut is widely expected by market participants, looser financial conditions and a resilient US economy could help strengthen risk appetite in markets.
UPDATE (December 9, 4:55 p.m. UTC): Adds details on price gain versus rising open interest.
