The crypto market move higher coincided with gains in the major stock averages. Crypto assets spiked more sharply around noon ET, though it's unclear what exactly could have caused the sharp move.
"You're probably going to see some wild moves up and down as bitcoin tries to march back to $30,000," said Callie Cox, analyst at investing firm eToro. "Add in summer trading volumes, and you have a recipe for day-to-day volatility. Bitcoin prices have been more resilient today on hopes for lower rates, and a few hours of stable trading could've been enough to bring buyers back in.
Crypto has been suffering from low liquidity and thin trading volumes since spring of this year, which has exacerbated moves on both the upside and the downside. This has been especially true throughout the seasonally sleepy month of August. "The correlation between equity indices and bitcoin has declined to near zero in 2023," said Sam Callahan, lead analyst at Swan Bitcoin. "Bitcoin's price appears to be bouncing after a sharp sell off last week that was exacerbated by over $2.7 billion worth of liquidations of leveraged positions."