Bitcoin Surges 20% as Whale Exits Short Position, ETFs Attract Funds

Bitcoin (BTC) was trading around its 200-day average of $84,000 as the notorious Hyperliquid whale exited its multimillion dollar short BTC position. This move contributed to a sense of optimism in the market, with smaller coins like CAKE, TKX, OKB, and ATOM also performing positively. The SUI token, however, struggled to extend Monday's 6% surge, which was driven by asset managers' ETF filings with the SEC, indicating growing institutional interest in the broader crypto market.

Despite some analysts declaring the end of the bitcoin bull run and casting doubt about the sustainability of the recent bounce, data suggested otherwise. The data pointed to exhaustion in the ETF-led selling pressure, with U.S.-based spot bitcoin ETFs attracting significant investor funds. This trend, if continued, could support bitcoin’s price by gradually building momentum in inflows.

The Federal Reserve's rate decision on Wednesday was anticipated to introduce volatility into the crypto market. A dovish statement from the Fed could potentially spur increased risk-taking. Analysts projected that bitcoin would trade within the range of $80,000 to $86,000 with 80% confidence, while ethereum was expected to fluctuate between $1,800 and $2,100 under the same confidence level. These ranges reflected potential movements tied to macroeconomic signals, investor sentiment, and broader financial conditions.

In the broader financial landscape, European stocks edged higher before a German parliamentary vote on historic debt reforms. Gold remained firm above $3,000 per ounce, with calls for it being a better diversifier than Treasury notes in the ongoing macro environment. Meanwhile, futures tied to major indices traded unchanged to negative amid reports of significant geopolitical developments.