The world’s largest cryptocurrency has fallen roughly 50% since the start of 2021.
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bitcoin It broke the $23,000 threshold for the first time in more than a month as hopes of a less aggressive rate hike than feared by the Federal Reserve triggered a relief rally in cryptocurrencies.
The world’s largest cryptocurrency rose 8% in 24 hours to as high as $23,800 on Wednesday, trading at levels not seen since mid-June. It was last traded at a price of $23,330.80, according to Coin Metrics data.
Traders took solace in the expectation of softer policy action from the Fed at the next rate-setting meeting.
The effects of tighter monetary policy from the US central bank have put a heavy weight on risky assets like stocks and crypto.
Bitcoin is still down about 50% since the start of 2021.
“This isn’t necessarily the end of the crypto bear market, but a relief rally for Bitcoin is long past due,” said Antoni Trenchev, CEO of crypto credit institution Nexo.
“Bitcoin is starting to find its feet after a shaky month and it will show next week,” Trenchev said. Said.
The US central bank is expected to raise rates again at its next policy meeting, but economists less aggressive increase this time by 75 basis points instead of 100.
Cryptocurrencies were touted as a source of value unrelated to traditional financial markets. But that thesis didn’t materialize as institutional capital poured into digital assets, the Fed began raising interest rates, and traders fled stocks.
According to Yuya Hasegawa, a crypto market analyst at Japanese crypto exchange Bitbank, a rally above $22,700 means that the cryptocurrency has recovered from its 200-week moving average, laying the technical ground for a “trend reversal.”
“The market needs a little more reassurance to slow the rate of Fed rate hikes,” he said. “Still, the short-term outlook for bitcoin is bullish and it could go up to around $29k this week.”
Meanwhile, traders expect the worst of the intense market contagion to stem from liquidity issues at some major crypto companies. subsidized.
Digital currencies have come under massive selling pressure over the past few months as the collapse of some major startups has caused market ripple effects. Terra, an algorithmic stablecoin, close to zero in Mayinitiating a chain of events that ultimately leads to bankruptcies of crypto companies Celsius, Three Arrows Capital and Voyager.
Crypto elsewhere ether Other “altcoins” were also higher as they climbed more than 1% to $1,543.76.
The second-largest token has surged more than 40% over the past seven days, fueled by optimism about a highly anticipated upgrade on its network known as “Merge”.
The developers expect the update, which will move ethereum from environmentally dubious crypto mining to a more energy efficient system, to be completed by September. 19.
“Crypto mining has been widely criticized for contributing to climate change due to its energy-intensive nature, and while wildfires raged in Europe and the United States, the promise that Ether transactions could be less damaging to the environment sparked a wave of interest.” said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown.
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