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A market-wide rally carried crypto prices higher through the day, even as Bitcoin remained in tight ranges before ending above $120k.
Total crypto market cap hit a new all-time high for the third time this month, reaching $4.2 trillion after climbing over 3%.
A wave of risk-on sentiment accompanied the latest leg of the crypto rally, pushing the Crypto Fear and Greed Index into the “greed” zone at 63.
Altcoins stole the show, with sectors ranging from DeFi to AI-linked tokens delivering standout gains. By late Asian trading hours on Wednesday, nearly every one of the top 100 cryptocurrencies was flashing green.
Why is the crypto market going up?
Bitcoin and cryptocurrencies started rallying after US inflation data reinforced expectations that the Federal Reserve could cut interest rates as soon as September.
July’s consumer price index held steady at 2.7% year-on-year, while core CPI ticked up to 3.1%.
Much of the increase came from the services sector, but traders focused on the broader trend of moderating inflation alongside signs of a cooling labor market.
Nonfarm payrolls showed slower hiring, and the unemployment rate rose to 4.2%, both seen as easing pressure on the Fed to keep policy tight.
Calls for deeper rate cuts added fuel to the optimism. Treasury Secretary Scott Bessent urged the central bank to deliver a 0.50% reduction next month, while President Donald Trump went further, pressing for a dramatic 300-basis-point cut.
The prospect of looser monetary policy sent investors toward risk assets, with crypto among the biggest beneficiaries.
Institutional demand has also played a pivotal role. Spot Bitcoin ETFs have continued to draw heavy inflows, lifting total assets under management to $54 billion.
Ethereum has attracted its own wave of buying, with spot ETFs pulling in more than $1.7 billion this week alone. SharpLink and BitMine, two publicly traded companies with active crypto treasuries, have maintained steady accumulation, adding weight to the bullish case.
At the same time, Bitcoin was trading close to its all-time high price while Ethereum, the largest altcoin, was sitting less than 4% from its own record. Traders typically view these two as the benchmark for broader market health, and their strength has reinforced confidence across the asset class.
What’s next for Bitcoin?
Many traders expected Bitcoin to reach fresh highs soon, yet a few market observers approached the rally with measured expectations.
According to analyst Daan Crypto Trades, Bitcoin remains range-bound and will either need to break into price discovery or continue moving sideways to allow positions to build on both sides.
$BTC Has now also taken out the large liquidity cluster at the $120K+ region, a level we were looking for after taking out the liquidity below $115K. BTC is still range-bound currently and will need to either break out into price discovery or continue to go sideways to build up
He observed that there were no major liquidity clusters nearby to guide the next move, which is why many traders have shifted their focus toward altcoins for shorter-term opportunities.
Rekt Capital, on the other hand, shared a more bullish chart outlook, saying Bitcoin has confirmed a breakout from its Bull Flag and flipped $120,000 into a new support level.
BTC/USD 1-day chart. Source: Rekt Cpaital on X.
He pointed to $126,000 as a key area to watch, arguing that clearing it could pave the way for a fresh all-time high.
Macro trends are also feeding into the outlook. U.S. Treasury data shows the national debt has jumped from $26.7 trillion in 2020 to more than $37 trillion — a 38% increase in just five years.
Over the same period, Bitcoin has risen by more than 925%, a move Bitget chief analyst Ryan Lee described as directly correlated with the debt surge.
“The more the debt grows, the higher the likelihood of BTC price soaring to new highs,” he said, adding that the U.S. government may eventually explore Bitcoin to help tackle its debt load.
Servicing the debt could also expand the global M2 money supply, which, according to Real Vision chief crypto analyst Jamie Coutts, can act as the “next significant catalyst” for Bitcoin.
Based on its historical correlation with money supply growth, Coutts projects the price could exceed $132,000 before the end of 2025.
Nevertheless, some market watchers questioned whether Bitcoin could push much higher from current levels, with one projection warning of a possible pullback toward $110,000. (See below.)
$BTC Pico top short chat 110k from here
At press time, Bitcoin bulls had tried to push through the $122,000 resistance but fell short, settling just above $121,000, up 1.3% over the past 24 hours.
Altcoin market rallies higher
The altcoin market cap rose 5.8% today to $1.82 trillion, with Ethereum (ETH) gaining 6.7% surpassing $4.7k before settling at $4,644, just at spitting distance from its all-time high reached in November 2021.
Traders are largely betting on Ethereum breaking past $5,000 by the end of this quarter, with some even picking up calls for higher prices of up to $7,500 by year-end, a target that aligns with Standard Chartered’s latest forecast for the asset.
According to blockchain analytics firm Santiment, Ethereum’s recent surge comes despite persistent sell-off from retail traders, consistent with its finding that prices have historically moved in the opposite direction of retail traders’ expectations.
Large investors were reportedly absorbing the ETH that smaller investors are selling, according to analysts at Santiment, leaving little sentiment-driven resistance to the asset’s upward move.
🫢 Ethereum is now within 6.4% of its $4,891 all-time high from November 16, 2021. There have been consistent sell-offs from retail traders as crypto’s #2 market cap has made this historic rally. Prices historically move the opposite direction of retail traders’ expectations.
This bullish backdrop is reinforced by institutional demand, with spot Ethereum ETFs drawing nearly $2 billion in new inflows over the past three trading days.
Other high-cap altcoins also rallied, with Solana (SOL) jumping 10% to lead gains, Cardano (ADA) adding 6%, and Dogecoin (DOGE) climbing 5%, contributing to the broader strength across the altcoin market.
In a recent post, Glassnode said the current market structure points to a broader rotation into altcoins, noting that market-cap-weighted 7-day returns across top tokens have breached the +1σ (one standard deviation above the mean) band three times since April.
The firm added that such moves signal statistically significant outperformance of altcoins relative to the broader crypto market, highlighting sustained capital inflows into the sector.
The ones that stood out among the top gainers today are OKB (OKB) with its triple-digit rally of 127%, followed by Fartcoin (FARTCOIN) and Arbitrum (ARB). See below:
Source: CoinMarketCap
OKB: OKB, the native token of crypto exchange OKX, surged today after the platform revealed it will hold a one-time burn of over 65.2 million OKB tokens, sourced from historical repurchases and treasury reserves.
The move will permanently fix the total supply at 21 million tokens. Token burns remove coins from circulation, increasing scarcity and potentially appreciating their value over time.
The exchange also revealed plans to upgrade its zero-knowledge Ethereum Virtual Machine (zkEVM)-based public chain, X Layer, aiming to position it as a leading network for DeFi, payments, and real-world asset (RWA) applications.
Fartcoin: Fartcoin’s gains come amid increasing interest from traders, as seen by its daily trading volume almost doubling over the previous day to over $712 million.
Arbitrum: ARB extended its rally, which began on Aug. 12 after decentralized lending protocol Morpho went live on the Arbitrum blockchain. The gains were further supported by broader market optimism.
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