TL;DR
- Bitcoin experienced a failed rally to $114,000, plummeting below $108,000 hours later.
- The initial surge was driven by positive news from the Federal Reserve regarding fintech access to its payment rails.
- Zcash (ZEC) bucks the trend with a 10% rise, while major altcoins mimic BTC’s instability.
It has been 24 hours of extreme turbulence in the digital asset sector, hours marked by a drastic “pump and dump” in the price of Bitcoin (BTC). The pioneer cryptocurrency, which was trading in a consolidated range between $107,000 and $109,000 yesterday, October 21st, experienced a sudden rally that took it to $114,000. However, the bullish momentum was short-lived, and BTC lost all its gains, briefly falling below $108,000 before stabilizing near $108,200 at the time of this writing.
The initial catalyst for this rise appears to have been a meeting of the U.S. Federal Reserve (Fed). during the meeting, it was revealed that the entity is exploring the creation of “payment accounts” that could grant cryptocurrency and fintech companies direct access to the Fed’s payment rails. The market interpreted this news as a bullish signal, causing the rapid ascent. Some analysts also noted that BTC’s rally coincided with a drop in the price of gold, suggesting a capital rotation from the precious metal to the digital asset.
As reported by CryptoPotato, this sudden rise resulted in multi-million dollar liquidations, affecting hundreds of thousands of traders who held risky positions with high leverage. Nonetheless, crypto market volatility became present when the bulls could not maintain momentum. Bitcoin’s valuation reversed with the same aggressiveness with which it rose.
Macroeconomic Factors Hit the Price
Although the source of the pullback is less clear, some users on the X platform attributed the drop to macroeconomic factors. Specifically, to threats from U.S. President Donald Trump to implement 155% tariffs on China starting November 1st, which reintroduced uncertainty into global markets.
The behavior of altcoins was mixed, reflecting the general confusion. Ethereum (ETH) traced an almost identical trajectory to BTC, spiking to nearly $4,100 before pulling back to $3,850. Major cryptocurrencies like Solana (SOL), Binance Coin (BNB), Ripple (XRP), and Cardano (ADA) remain trading at levels similar to yesterday, without major gains or losses.
Meanwhile, Zcash (ZEC) stood out as one of the top performers, posting a double-digit increase (10%). ChainOpera AI (COAI) led the gains with 57%. On the opposite end, Aster (ASTER) and Mantle (MNT) registered significant losses. The total crypto market capitalization remains stable at around $3.75 trillion, suggesting that the crypto market volatility of the last few hours was more of an internal redistribution than a net outflow of capital.
