Cryptocurrencies surged on Tuesday following the release of cooler-than-expected inflation data, which diminished expectations for a Federal Reserve rate hike. Bitcoin reached $65,000 for the first time in over three weeks, while Ethereum approached $1,900, according to market data. The total cryptocurrency market capitalization stood at $2.15 trillion, a decrease of 2.06% over the last 24 hours.
Key Details
The June Consumer Price Index showed lower inflation, which led to a rebound in stock markets as well. The Dow Jones Industrial Average rose by 9.63 points, or 0.02%, to close at 52,508.27. The S&P 500 increased by 0.38% to finish at 7,543.59, and the Nasdaq Composite gained 0.9% to end at 26,107.01. Analysts noted that the soft inflation figures significantly reduced the likelihood of an interest rate increase at the Federal Reserve's upcoming policy meeting.
Background
Despite the positive market movement, geopolitical tensions remained high, particularly following U.S. military actions against Iran in the Strait of Hormuz. Over the past 24 hours, more than $350 million was liquidated from the cryptocurrency market, primarily impacting bearish traders, as reported by Coinglass.
Related coverage: Trump Threatens Strikes on Iran Amid Hormuz Tensions.
The cryptocurrency rally is likely to influence investor sentiment in the tech sector, particularly for companies involved in digital assets. Stocks related to cryptocurrencies may see increased volatility as traders react to the changing economic outlook. Investors will watch for further developments from the Federal Reserve regarding interest rates at their next meeting scheduled for later this month.