Cryptocurrency market rallies sharply on Thursday after Trump administration inked a trade deal with the United Kingdom.

The cryptocurrency market rallied sharply on Thursday after the Trump administration inked a trade deal with the United Kingdom.

The cryptocurrency market experienced a substantial rally on Thursday.

What Happened: Bitcoin crossed the $100,000 mark after a three-month wait, sparking a broader market recovery. The flagship cryptocurrency nearly touched $104,000 in a volatile session, and trading volume increased by 59% in the last 24 hours.

Bitcoin’s gains were outpaced by its younger counterpart, Ethereum, which broke out after weeks of trading sideways around the $1,800 range. The second-largest cryptocurrency breached $2,200, a level not seen in over two months.

The rally pushed Ethereum's market dominance past 8% for the first time in over a month.

Bearish leveraged traders suffered significant losses as the rally wiped out nearly $800 million in short positions.

Interestingly, Bitcoin's Open Interest dropped 0.20% in the last 24 hours, suggesting that the rally may have been driven by short covering. Conversely, Ethereum's Open Interest surged by 20%.

The "Greed" sentiment prevailed in the market, according to the Crypto Fear and Greed Index.

Top Gainers (24-Hours)

The global cryptocurrency market cap rose by 6.91% to reach $3.22 trillion in the last 24 hours.

Stocks also rose on Wednesday. The Dow Jones Industrial Average climbed by 254.48 points, or 0.62%, to close at 41,368.45. The S&P 500 lifted by 0.58% to end at 5,663.94, while the tech-heavy Nasdaq Composite gained by 1.07% to finish at 17,928.14.

The risk-on sentiment was further supported as the Trump administration signed its first major trade agreement with the UK, boosting confidence in more global deals.

This comes ahead of Treasury Secretary Scott Bessent's meeting with top Chinese officials for trade negotiations.

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Analyst Notes: Cryptocurrency analytics firm Santiment said the ongoing bullish sentiment could be a "double-edged sword" for upcoming price moves.

"On one hand, retail FOMO can add a bit of extra fuel to this rally as major media outlets spam Bitcoin’s 3-month milestone and bring in many new entries to the space. On the other hand, we typically see rallies put on the brakes when there is an overwhelming amount of calls related to ‘higher’ or ‘above,’" the firm added.

Cryptocurrency analyst and trader Rekt Capital highlighted Ethereum's stratospheric gains during the day, emphasizing the importance of the $2,200 level.

"Reclaim ~$2200 and Ethereum will resynchronise with its $2200-$3900 macro range," the analyst noted.