The Crypto Market Has Broken Out of Its Consolidation

Market Overview

The cryptocurrency market has risen by almost 8% over the past 24 hours to $2.37T, reaching its highest level since early June. The initial momentum came on the back of news that the US Treasury was supporting the debt market. This relatively small but timely move signalled that the government is monitoring the situation in the debt markets, spurring demand for risk assets. The rally was then fuelled by a wave of short-covering, following weeks of extremely narrow trading.

Bitcoin reached $70K, posting a 9% rally over 8 hours during the US trading session. As the new day began, the leading cryptocurrency retreated slightly to $69.6K. On Monday, BTC consolidated above the 50-day moving average, and by Wednesday, it had already tested the 200-day MA. As expected, the market’s long-compressed spring snapped back, catching those who had been range-trading and those who had been building short positions on the rise off guard. If Bitcoin does not quickly lose its recent gains, it will be a significant sign that a bull market has begun, much like in October 2023 or March 2020.

Ethereum recorded an even more impressive breakout, showing an 18% gain over 24 hours at its peak. Having risen to $2.25K, the second-largest cryptocurrency is trading near its April–May highs, having broken above its 200-day moving average and away from a long-term support line that has risen from around $1.75K to $1.9K over the past 8 months. The next significant level where the coin may face resistance to further gains appears to be the $2.5K–$2.8K range.