Bitcoin
and other cryptocurrencies advanced on Thursday, lifted by an improvement in appetite for risk as markets increasingly expect that the Federal Reserve is finished raising interest rates in its battle against inflation.
The price of Bitcoin rose 2.5% over the past 24 hours to $35,300, crossing last week’s peak around $35,000 and nearing the $36,000 mark—its highest level since cryptos accelerated into a brutal bear market in May 2022. The largest digital asset has rallied more than 30% in a matter of weeks, with Bitcoin snapping a multi-month streak of subdued volatility and trading volumes to return to its characteristic action.
“Bitcoin broke the upper boundary of the weeklong consolidation, climbing to $36,000 early on Thursday before retreating,” said Alex Kuptsikevich, an analyst at broker FxPro. “Technically, the recent jump is a confirmation of the bullish bias. Bitcoin may not face significant resistance until $41,000, but the maximum target for this momentum is $46,000, where there was the last reversal.”
Multiple forces are pushing crypto prices higher. There remains significant buoyancy from optimism that the Securities and Exchange Commission (SEC) will soon approve a spot Bitcoin exchange-traded fund (ETF), which would be expected to usher in a fresh wave of retail and institutional interest. Geopolitical risk from conflict in the Middle East has also renewed calls for Bitcoin as a haven asset, like gold.
The latest catalyst for crypto gains is Wednesday’s monetary policy decision from the Fed. While the central bank signaled that it could still raise interest rates further to tame inflation, market pricing of rate futures suggests traders are confident that its work is done. The Fed has raised borrowing costs at the most dramatic pace in a generation since early last year as inflation hit a multidecade peak, with a tightening in financial conditions slamming risk-sensitive assets like stocks and cryptos.
Bitcoin, like the
Dow Jones Industrial Average
and
S&P 500,
has benefited off the back of the Fed decision and the market’s dovish outlook, also underscoring that macroeconomics still matters to crypto traders.
Beyond Bitcoin,
Ether
—the second-largest crypto—rose more than 1% to $1,830. Smaller tokens or altcoins were even more buoyant, with
Cardano
jumping 7% and
Polygon
6% higher. It was more of the same from memecoins, with
Dogecoin
surging 5% and
Shiba Inu
gaining 4%.
Write to Jack Denton at [email protected]
Read the full article here
