A minor crypto rally is happening today, May 17, with Bitcoin rising to $78,000. Humanity Protocol (H) token jumped by 11% in the last 24 hours, while Chiliz (CHZ), Venice Token (VVV), Zcash (ZEC), and Injective (INJ) rose by over 10%. The market capitalization of all tokens jumped to $2.6 trillion.
Crypto Rally: Humanity, Chiliz, and Venice are Leading Gains
The ongoing crypto rally is happening despite being no major news in the industry. As such, the most likely reason why tokens like Chiliz, Humanity, and Venice are soaring is that investors are buying the dip after the recent crash.
Indeed, as we wrote in this report, these tokens were among the top laggards on Saturday. In most cases, it is common for the top laggards in a day to become the top gainers a day later. This rebound is usually known as a dead-cat bounce, also known as a bull trap.
The crypto market is still facing some substantial risks, which may make the ongoing rally temporary. For one, data shows that spot Bitcoin ETFs have shed over $1 billion in the last five trading days. Ethereum ETFs also shed millions of dollars in assets.
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Crypto Market Faces Some Major Risks
The biggest risk the crypto market faces is macro. In this, the US dollar index and bond yields have jumped sharply in the past few months. The dollar has soared to $99.9, while the 10-year yield has risen to 4.55%. Also, the 30-year yield rose to over 5%.
These numbers mean that market participants are preparing for the Federal Reserve to maintain a highly hawkish view. That’s because US inflation has continued rising amid the soaring crude oil prices. The CPI jumped to 3.8%, while the producer price index hit the 6% level.
Therefore, the Federal Reserve will likely maintain rates between 3.5% and 3.75%. Indeed, some analysts believe that the next Fed move will be a hike, which may happen later in 2027. Cryptocurrency prices tend to do well when the Fed is cutting rates.
The other risk, which we covered here, is that Bitcoin has formed a rising wedge pattern. Its two MACD lines formed a bearish crossover. These patterns mean that the price may be at risk of a strong bearish breakdown in the near term.
As a result, if this happens, there is a likelihood that Bitcoin will plunge to $70,000 and below. Such a move will lead to more downside among altcoins like Venice, Humanity, and Chiliz.
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