Bitcoin, Ethereum, Dogecoin Fail To Sustain Uptrend After Fed's Hawkish Guidance: Analyst Forecasts 'Start Of The Most Euphoric Time In Crypto'

Leading cryptocurrencies surged Wednesday after days of corrective action, as favorable inflation data and the Federal Reserve's rate pause spurred investments into risk-on markets.

What Happened: Bitcoin spiked to nearly $70,000 earlier in the day following the release of cooler-than-expected consumer price data for May. However, the uptrend didn't last long as Federal Reserve Chair Jerome Powell remarked that policymakers "want to gain further confidence" on inflation before considering interest rate cuts cooled market enthusiasm.

In the last 24 hours, 65,003 traders were liquidated, with the total liquidations at $194.73 million. Long liquidations accounted for 55% of the total. Bitcoin led with more than $52 million in total liquidations, followed by Ethereum at $49.63 million.

Despite the surge, Bitcoin's Open Interest dropped 0.86% in the last 24 hours, indicating short covering by sellers, typically interpreted as a bearish signal.

That said, Bitcoin's Longs/Shorts Ratio surged dramatically in the last 24 hours, suggesting the dominance of bullish leveraged bets. 

The cryptocurrency fear and greed index flashed "Greed," suggesting that FOMO was still prevalent in the market.

Top Gainer (24 Hour)

The global cryptocurrency market cap stands at $2.48 trillion, increasing by 1.62% in the last 24 hours.

Key stock indices moved further up Wednesday. The broader index, S&P 500, jumped 45.71 points, or 0.85%, to close at a record high of 5,421.03. Similarly, the tech-focused Nasdaq 100 rose 1.53% to finish at a record high of 17,608.44. The Dow Jones Industrial Average, on the other hand, slipped 0.09% to end at 38,712.21. 

The central bank kept interest rates unchanged as expected during the FOMC meeting.

The Fed's stance followed the release of cooler-than-expected consumer price data for May, boosting the prospects of a rate cut later in the year.

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Analyst Notes: A widely-followed cryptocurrency trader, who goes by pseudonym Moustache, drew attention to a significant feat by Bitcoin that has only happened three times before.  

"It’s about to leave the 0.5 line(MZ BTC Bottom-Indicator).In 2012, 2017 and 2020 this was the start signal for the most euphoric time in crypto," the trader stated.