• Ethereum and bitcoin rally gathers steam
  • AUDUSD pair under pressure amid dollar strength
  • Oil prices rally hurt by  growing demand concerns
  • US equities rally following $1 trillion infrastructure package passing

Cryptocurrencies are flying high, with Ethereum and Bitcoin leading the recovery following the second quarter sell-off. As shorts continue to unwind positions, Ethereum has continued to attract bids powering through key resistance levels as a bounce back from five-month lows gathers steam.

Cryptocurrencies rally

ETHUSD has since found support above the $3,000 level and flirted with four months highs.

Analysts remain optimistic about Ethereum prospects, following the recent hard fork upgrade dubbed ‘London’ that went live the past week. The network upgrade has contributed a great deal to ETHUSD outperforming the overall market in recent days.

Chart showing ETHUSD rally

The number of sellers around Ethereum has decreased significantly. Over the past few months, more people have taken the ETH tokens out of exchanges and into wallets or locked in smart contracts. 

With 26% of ETH supply locked away, the number of sellers continues to decrease, all but making it easy for bulls to push the cryptocurrency higher. However, it is the return of optimism in the broader cryptocurrency market that appears to be fuelling the bullish momentum on ETHUSD.

Bitcoin is also showing some strength after powering through the $40,000 level last week. After reaching the $46,000 level, bulls are likely to make a run for the $50,000 level on BTCUSD.

Chart showing BTC/USD strong bounce back

Bitcoin’s impressive run is supported by positive rhetoric from Elon Musk among other institutional investors. Tesla confirming it is open to accepting BTC payments, continues to fuel the price gain, in addition to Musk holding on to BTC tokens.

AUDUSD sell-off

In the forex market, the Australian dollar remains under pressure amid a soaring bid tone on the US dollar. The AUDUSD pair remains on the defensive and susceptible to further losses as it continues to trade near three-week lows.

Chart showing bearish momentum on AUDUSD

A sell-off followed by a close below the 0.7310 level could trigger renewed selling that could see the AUDUSD pair sliding back to lows of 0.7280 levels. 

The bears are in control in the aftermath of early tapering talks in the US that continue to fuel dollar strength across the board. The COVID-19 jitters, which have triggered a new round of restrictions in Australia, also continue to weigh heavily on the riskier Aussie dollar.

The release of the consumer inflation figures could further add to the fuel of Fed tapering, sending the dollar high against the majors and the AUDUSD pair lower.

Oil demand concerns

Oil prices remain under pressure in the commodities market due to growing demand concerns amid the escalating Delta variant crisis in some of the biggest economies. Mobility curbs in China, one of the biggest consumers of black gold, continue to weigh heavily on traders’ sentiments.

Chart showing US oil bounce back

After a 2.7% jump on Tuesday, US oil is down early Wednesday at $68.11 as the bounce back past the $70 a barrel remains elusive. Brent crude is trying to hold on above the crucial psychological level, trading at about $70.47 at the time of writing.

While both are trading above the 100-day Moving Average, the lack of meaningful momentum arouses concerns about higher prices. Beijing imposing travel restrictions to curb the spread of the delta variant could significantly hurt demand, sending prices lower.

US stocks bounce back

US stocks were yet again on the front foot on Tuesday, with the major indices rallying following the passing of a $1 trillion infrastructure package by the senate in the US. Rallies in the energy materials and industrial companies helped fuel a 0.1% gain for the S&P 500, and the Dow Jones gained 0.5%.

chart showing S&P consolidation

Stocks have staged an impressive recovery even as the debate over the FED tapering continues to raise concerns in the overall market.