Bitcoin Breaks Through $90,000 Mark Following Massive Wall Street Buying Spree

Strong Recovery Following Monday's Correction

The crypto market is proving extremely robust: Bitcoin has broken through the psychologically important $90,000 mark and recorded gains of around 7 percent ^[1]. After a turbulent Monday, when the leading cryptocurrency had lost up to 8 percent, institutional capital is now driving a strong rally.

The entire crypto industry is benefiting from the positive sentiment. Ethereum climbs nearly 10 percent and surpasses the $3,000 threshold ^[1]. The sector's total market capitalization grows by 6.5 percent ^[1].

Institutional Investors Drive Rally

Several significant developments are responsible for the rapid increase. Vanguard, the world's second-largest asset manager, is opening up to crypto ETFs ^[1]. This strategic reorientation of a traditionally conservative asset manager sends a strong signal to the financial industry.

Even more remarkable is the positioning of Bank of America, the second-largest bank in the United States: The financial institution now recommends an allocation of 1 to 4 percent in cryptocurrencies for portfolios ^[1]. This recommendation marks a turning point in institutional acceptance of digital assets.

BlackRock's Bitcoin ETF, IBIT, underscores this trend impressively: it is currently the most-traded ETF worldwide ^[1]. The asset manager's Ethereum ETF also already ranks fourth in the global standings ^[1].

Altcoins with Double-Digit Gains

Some altcoins are particularly benefiting from the market recovery. The coin of NFT company Pudgy Penguins shoots up 30 percent, followed by Sui with 21 percent and Worldcoin with 18 percent gains ^[1].

Technical Indicators Point to Market Bottom

Technical analysts see clear signs of a sustained market recovery. The Velocity RSI indicator, which accounts for changes in price dynamics, has fallen below 10 out of 100 points on its 3-day chart ^[2]. These extremely oversold levels have historically only been reached during major market bottoms.

"The Velocity RSI has just reached its lowest value since the lows of the past three bear markets," explains analyst On-Chain Mind ^[2]. The indicator is considered one of the most reliable momentum exhaustion indicators and now signals a level that is typically observed only during major cyclical restarts ^[2].

Background of Monday's Correction

Monday's pullback was due to a massive deleveraging event in which positions worth a total of one billion US dollars were liquidated ^[1]. The background was the rising probability of interest rate hikes in Japan, which would negatively impact global liquidity ^[1].

According to Grayscale, however, the correction was completely normal. The asset manager believes that Bitcoin could reach new all-time highs within a few weeks ^[1]. Current market developments appear to confirm this assessment.