(Bloomberg) -- A fresh wave of liquidations in bearish bets — this time on Ether, the second-largest cryptocurrency — drove Friday’s brief rally.
Prices of most digital assets spiked as financial markets were whipsawed by a deluge of US economic reports and retreating oil prices. The moves were reminiscent of the volatility at the end of August, where a surge in Bitcoin helped to unleash the biggest wave of short liquidations on record going back to 2021.
Ether jumped as much as 8.3%, the biggest intraday increase since the spike three weeks ago. Bitcoin increased by less than 4%. Both tokens have since pulled back from their highs.
The quick market move suggests prices are being driven more by speculation than actual demand. Traders have largely stayed on the sidelines since the August rally given the lack of clear catalysts following the forced deleveraging.
The recent range-bound trading “looks like consolidation with fading short-term momentum rather than a confirmed structural breakdown,” said Lacie Zhang, a research analyst at Bitget Wallet.