For the first time in more than a month, Bitcoin crossed the $23,000 mark as relief in the cryptocurrency sparked expectations for a Federal Reserve rate move that will be less severe than expected.
The world’s largest cryptocurrency soared to $23,800 on Wednesday, up 8% in one day and trading at levels not seen since mid-June. The last price recorded by the coin metrics was $23,330.80.
The possibility of the Federal Reserve adopting a looser policy at its next rate-setting meeting gave traders hope.
Risky assets such as stocks and cryptocurrencies have been negatively affected by the tighter monetary policies of the US Central Bank.
The price of Bitcoin has fallen by regarding 50% since the beginning of 2021.
According to Anthony Trenchev, CEO of crypto lender Nexo, “This is not necessarily a result of a bearish crypto market, but the bitcoin price rally is long overdue.”
After a difficult month, Trenchev said, “Bitcoin is starting to get back on its feet, and next week it will tell us.”
At the upcoming policy meeting, the US central bank is expected to raise interest rates once more, but economists expect a less pronounced increase of 75 basis points instead of 100.
The value of cryptocurrencies has been hailed as unrelated to traditional financial markets. However, with institutional money rushing into digital assets as interest rates start to rise and traders abandon stocks, this assumption has been proven wrong.
According to Yuya Hasegawa, crypto market analyst at Japanese exchange Bitbank, the rally beyond $22,700 indicates that the cryptocurrency has now regained its 200-week moving average, setting the technical parameters for a “trend reversal.”
He said the market needed more assurance that the Fed would slow the pace of rate hikes. “Bitcoin’s Short-Term Outlook Is Optimistic, It May Rise To $29, As This Week,”
Bitcoin climbs past $23,000 as hopes of softer Fed action fuel crypto relief rally https://t.co/zAap5DnOTh
— CNBC (@CNBC) July 20, 2022
