Crypto Market Explodes with Pumps After Bitcoin (BTC) Recovery
The crypto market showed its ability to react almost immediately to signs of recovery. Altcoins, which have rapid slides during corrections, are also capable of regaining positions just as fast. Some exceptions stand out due to renewed interest and an expectation for moving to a much higher range.
The day’s biggest gainer was Ethereum Classic (ETC), which broke above $39 in hours. ETC had 300% gains in the past month, over hope that miners will choose the network to compensate for the loss of Ethereum mining.
ETC continued to climb to $43.98 ahead of the weekend, moving in the place of Litecoin (LTC) and once again becoming a top 20 token.
ETC has reached all-time highs of $120, though it remains far behind ETC and has always traded with more limited gains. Now, ETC has the chance to move to a higher tier after falling to the $13 range during the June crash.
The current ETC rally happens on relatively low trading volumes, putting up a potential volatility scenario where ETC breaks down just as fast. On the positive side, with more miners and nodes, ETC may raise its security, not repeating the mining attacks that lowered its reputation in the past.
ETH Breaks Above $1,700
ETH kept up with the gains, adding more than 15% in a single day for a strong recovery. ETH remains more active compared to BTC and reacted with appreciation to $1,731.51. ETH has also gone through a capitulation and returned to a relief rally, after hovering just above $1,000. At that level, forced liquidations also affected positions before the asset could start another upward move.
ETH is also in demand for deposits to the ETH 2.0 smart contract. More than 13M tokens have been locked, creating a market for the derivative market for locked ETH. Lido DAO (LDO) also benefitted from the demand, rising 55% in a single day to $2.47. Lido DAO is the sole issuer of an asset based on deposited ETH, exposing traders to a small disparity in prices between ETH and locked ETH tokens. The asset of Lido DAO is used within DeFi due to the low risk and secure backing by actual ETH, though currently it is not directly redeemable.
ETH also boosted the positions of its related projects, including Uniswap (UNI). The UNI token gained popularity and turned into the second-best gainer for the day, adding 33% to $9.23.
BTC Breaks Above $24,000
BTC also traded dynamically, boosting its volumes from around $28B per day to above $44B per day. With a small delay, BTC broke above the $24,000 barrier, which may be a signal for a longer rally.
BTC took almost the whole working week to rally hard, but when the direction finally changed, the gains came within hours. Despite the recovery, BTC lagged behind the more dramatic altcoin rallies, retaining an overall market cap dominance of 41.6%.
The rapid recovery has not yet been reflected in trading sentiment, and BTC still trades with a fearful sentiment at 32 points. However, the mood may shift rapidly and BTC may regain previous positions closer to $30,000.
The current rally led to about $47M in BTC liquidations, as traders were aware of the risk of shorting. But the ETH attack on short positions was more dramatic, leading to more than $140M in liquidations. The rapid appreciation was partially unexpected as the whole market still held signs of risking another downturn.
Coordinated CEL Short Squeeze Continues
CEL, the token of the now defunct Celsius fund, continues to trade on most exchanges. But the asset sees a concerted effort similar to the short squeeze of GameStop. Traders are organizing to take CEL off the market and unavailable, and boost demand to cover shorts.
The recent pressure took CEL up to $1.35, with a potential to continue climbing. Short-term predictions see CEL at the $2.25-$2.50 range. The current setup remains extremely risky and depends on deliberate efforts to attack short positions and make traders pay more to avoid liquidations.
The FTX exchange leads the activity of CEL short squeeze, at least until coin supplies last to support all positions.
Even with a small CEL price move, there are significant liquidations, expecting to have more short sellers try to buy CEL at a higher price. The risk for CEL owners is that FTX may halt trading to avoid volatility.
Supporting the CEL short squeeze is seen as a highly risky move, akin to joining the GameStop trend. There is no guarantee of returns and there are risks of stalled trading and a rapid crash.
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