Stimulating Hopes Will Force Bitcoin rally, Ethereum To Record Highs

Cryptocurrencies rallied on Wednesday, led by a surge in the bitcoin and ethereum markets as traders pinned their hopes on additional stimulus packages in the United States.

The purchase price of one bitcoin exceeded $ 36,000, while Ethereum's own token, Ether, set a new record at $ 1,574. Other large-cap tokens, including DOT from Polkadot, LTC from Litecoin, and LINK from Chainlink, also rose in the 7-9 percent range, adding about $ 19 billion to the total value of the crypto market.

Bitcoin has hit a new high since the start of the week at $ 36,888. Source: BTCUSD on TradingView.com

Bitcoin bubble fears weakening.

Some of the gains in major crypto assets came amid easing concerns over an overvalued US stock market. During the coronavirus pandemic, major players including Alphabet and Amazon reported record sales in their latest earnings reports.
Spotify Technology and Apollo Global Management will announce their earnings ahead of the first call on Wednesday. Qualcomm and Costco Wholesale will report the same after the close of trading.

Bitcoin, also a pandemic winner, is prone to face the risks of stock market bubbles. In March, a crash in the global financial market forced traders to cover their margin calls by selling whatever lucrative assets they have to keep cash safe. This continued until Bitcoin fell 60 percent in just two days.

As such, it looks like the positive stock market sentiment has given Bitcoin bullish support. Meanwhile, Ethereum, which remains positively correlated with Bitcoin, expects it to follow the trend of the royal cryptocurrency to secure further highs.

Ethereum price has reached an all-time high. Source: ETHUSD on TradingView.com

Stimulating conversations

Bitcoin traders are also watching talks between lawmakers over the next round of coronavirus stimulus measures. President Joe Biden's administration has pledged $ 1.9 trillion in aid. Meanwhile, Republicans want to cap stimulus to nearly $ 618 billion.

Democrats now plan to push their economic stimulus deal on their own given their 50 percent control over the Senate and expectations that Vice President Kamala Harris will vote in their favor.

“There is a greater focus on timing,” said Sima Shah, chief strategist at Principal Global Advisors. “There is general agreement that the incentive will be significant; the important question is whether it will come soon enough because the US economy needs it now. "

As usual, the prospect of additional stimulus could push the US dollar down despite its recent recovery attempts. This, in turn, could allow cryptocurrencies like Bitcoin and Ethereum to maintain their medium-term bullish bias.

Source: newsbtc.com


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