What started as a slow U.S. morning on crypto markets has taken a quick turn, with $Bitcoin (BTC.CC)$ re-taking the $94,000 level.
Hovering just above $90,000 earlier in the day, the largest crypto surged back to $94,000 minutes after 16:00 UTC, gaining more than $3,000 in less than an hour and up 4% over the past 24 hours.
$Ethereum (ETH.CC)$'s ether jumped 7% during the same period, while native tokens of $Cardano (ADA.CC)$ and $ChainLink (LINK.CC)$ climbed even more.
The action went down while silver climbed to fresh record highs above $60 per ounce.
While broader equity markets remained flat, crypto stocks followed bitcoin's advance. Digital asset investment firm $Galaxy Digital (GLXY.US)$ and bitcoin miner $CleanSpark (CLSK.US)$ led with gains of more than 10%, while $Coinbase (COIN.US)$ , $Strategy (MSTR.US)$ and $Bitmine Immersion Technologies (BMNR.US)$ were up 4%-6%.
While there was no single obvious catalyst for the quick move higher, BTC for weeks has been mostly selling off alongside the open of U.S. markets. Today's change of pattern could point to seller exhaustion.
Vetle Lunde, lead analyst at K33 Research, pointed to "deeply defensive" positioning on crypto derivatives markets with investors concerned about further weakness, and crowded positioning possibly contributing to the quick snapback.
Further signs of bear market capitulation also emerged on Tuesday with Standard Chartered bull Geoff Kendrick slashing his outlook for the price of bitcoin for the next several years.
The Coinbase bitcoin premium, which shows the BTC spot price difference on U.S.-centric exchange Coinbase and offshore exchange Binance, has also turned positive over the past few days, signaling U.S. investor demand making a comeback.
The Federal Reserve is expected to lower benchmark interest rates by 25 basis points at its two-day meeting concluding on Wednesday. While the rate cut is largely anticipated by market participants, looser financial conditions with a resilient U.S. economy could help bolster risk appetite on markets.
