Cryptocurrencies soar to 3-week high

There´s currently a very strong rally in the cryptocurrency market. If yesterday (on Tuesday) it seemed that the 'cryptos' did not find a clear trend, today it must be said that they have reached levels not seen for weeks. For example, Bitcoin (BTC), that with a 7% rise in the last 24 hours, has regained $20,000 for the first time since October 7 after several unsuccessful attempts. Ethereum (ETH), the world's largest 'altcoin', has also surpassed $1,500 for the first time since September 15, the date of 'The Merge', and has soared almost 15% in the last few hours.

Meanwhile, other cryptocurrencies such as Binance Coin (BNB) or Ripple (XRP) have scored rises of more than 5% and 4%, while Cardano (ADA), Solana (SOL), Polkadot (DOT) or Dogecoin (DOGE) have soared above 12% and continue to rise. Polygon (MATIC) is up 7.78% and Shiba inu (SHIB) is up 5.22%. Virtually all of them are at a three-week high.

"Finally, volatility will kick in," acknowledged Michaël van de Poppe, CEO of trading firm Eight. However, what is causing this market turmoil? According to Edward Moya, senior market analyst at Oanda, the cause are the expectations that the Fed will step on the brakes later this year as the dollar "is weakening."

"The economy is showing more signs of weakening and that is helping investors to be confident that the Federal Reserve (Fed) will be in a better position to slow its pace of tightening after next week's FOMC meeting," Moya pointed out.

The expert also highlighted that this week "is full of important risk events that could help maintain the uptrend in the markets in general". Among them, "major technology earnings, a couple of important central bank decisions and the first glimpse of third quarter GDP" will "weigh on risk appetite this week".

On the other hand, many are still watching the movements of the S&P 500, with which BTC has correlated closely in recent times. Yesterday, Wall Street closed higher and today, on Wednesday, the market expects the rally in the US stock market to continue.

Also, data from Coinglass shows that the market has been heavily shorted, as more than $700 million in Bitcoin has been settled in the past 24 hours, a three-month high. The next highest level of settlements was on August 19, when $562 million was settled.