Leading cryptocurrencies ushered in a strong rally Wednesday after Ripple Labs' announced victory in the SEC lawsuit and dovish signals from Federal Reserve Chair Jerome Powell.

Bitcoin surged to a 10-day high of $87,443.27 late evening, before profit-taking pulled it back to the $86,000 region.

Leading cryptocurrencies displayed a strong rally Wednesday after Ripple Labs' announced victory in the SEC lawsuit and dovish signals from Federal Reserve Chair Jerome Powell saw traders return to the market.

What Happened: Bitcoin surged to a 10-day high of $87,443.27 late evening, before profit-taking pulled it back to the $86,000 region.

The second-largest cryptocurrency, Ethereum, reclaimed the critical $2,000 price point after ten days, with the coin rising 4.5% over the previous day.

The bullish cryptocurrency-specific catalyst was Ripple CEO Brad Garlinghouse's announcement that the SEC won't seek further appeals in the four-year-long legal case. The news also sent XRP, the coin at the center of the dispute, rallying nearly 10%.

The northward movement liquidated $355 million from the cryptocurrency market over the last 24 hours, with short positions accounting for $258 million.

The rally in spot prices also energized the derivatives market, with Open Interest for both Bitcoin and Ethereum contracts surging over 6%.

Interestingly, the majority of Bitcoin speculative traders were positioned short as of this writing, according to the Long/Short ratio.

The market turned "Neutral" after a prolonged stay in the "Fear" zone, according to the Crypto Fear and Greed Index.

Top Gainers (24-Hours)

The global cryptocurrency market capitalization stood at $2.84 trillion, expanding 4.17% in the last 24 hours.

Stocks rebounded Wednesday after a judge ruled in favor of a third time applying for administrative relief to remain in the U.S. and considering a new angle for tying the case to the Payer Plan. The Dow Jones Industrial Average surged 383.32 points, or 0.92%, to close at 41,964.63. The S&P 500 rose 1.08%, ending at 5,675.29, while the tech-heavy Nasdaq Composite spiked 1.41% to close at 17,750.79.

On expected lines, the central bank kept the benchmark interest rates unchanged at the current 4.25%-4.50% range, although it projected two rate cuts for the rest of the year.

The Fed Chair also indicated that inflation driven by new trade tariffs might be "transitory," and that the recession risk remains "moderate" and "not high."

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Analyst Notes: In a note to Benzinga, Chris Kline, COO and Co-Founder of BitcoinIRA stated that the end of the XRP saga would "excite" the XRP community and boost adoption.

"I certainly know quite a few of our clients will be excited as it feels a lead weight has been lifted," Kline added.

Influential cryptocurrency analyst Ali Martinez said that while Ethereum may have breached the $2,000 resistance, $2,400 must be "conquered" for a bullish flip.

#Ethereum $ETH smashed $2,000 today! But conquering the $2,400 zone is a must for a bullish flip.