The outlook for the cryptocurrency market improved on Tuesday as BlackRock’s recent application for a spot Bitcoin (BTC) exchange-traded fund, and rumors that Fidelity is looking to follow suit, helped boost BTC and the broader altcoin market.
Stocks Trend Down as Investors Await Fed News
Stocks, on the other hand, trended down as investors remain hesitant to put more money to work in the markets ahead of Fed Chair Powell’s upcoming testimony in front of a House Committee that will provide insight into the central bank’s future plans on interest rates.
Bitcoin’s Price Spike on Tuesday
Data provided by TradingView shows that after holding near $27,000 in the first half of the trading day on Tuesday, Bitcoin’s price spiked in the afternoon, hitting a daily high of $28,315 before pulling back to support at $28,200.
Kitco senior technical analyst Jim Wyckoff highlighted that “July Bitcoin futures prices [were] higher in early U. S. trading Tuesday, as the market has seen a good short-covering bounce after prices last week hit a three-month low.”
“While the bulls have gained some strength, the BC bears still have the slight overall near-term technical advantage as a price downtrend is still in place on the daily bar chart,” Wyckoff said. “However, more price gains this week would negate the price downtrend and give the bulls better power.”
BTC Recovery and Golden Cross Signal
Tuesday’s price action appears to have done just that, as noted by market analyst Rekt Capital, who posted the following tweet noting that a spike above $28,000 would negate the multi-week downtrend for BTC.
Not only is BTC showing a strong recovery, but its 20-day moving average has also performed a golden cross with its 200-day moving average, a bullish signal that has never happened before.
Reasons Behind the Rally
As for the reason behind the Tuesday rally for BTC, MN Trading founder Michaël van de Poppe posted the following tweet highlighting the recent developments that have led to the bullish turn of events for the crypto market.
All but a handful of tokens in the top 200 traded in the green on Tuesday as the rising price of BTC encouraged traders to reengage with the altcoin market.
Stacks (STX), a platform that enables smart contracts and decentralized applications to use Bitcoin as an asset and settle transactions on the Bitcoin blockchain, led the market with a gain of 19.15%, followed by an 18% gain for Optimism (OP) and an 11.92% gain for Conflux (CFX).
The overall cryptocurrency market cap now stands at $1.11 trillion, and Bitcoin’s dominance rate is 49%.