Bitcoin BTC Price Holds Steady Above $28K, Ether ETH Price Rises in Post-Fed Rally
Bitcoin (BTC) hovered above $28,000 on Thursday as major cryptocurrency assets shrugged off the US Federal Reserve’s 25 basis point interest rate hike and ongoing concerns about the banking sector and future monetary policy decisions.
BTC, the largest cryptocurrency by market cap, was recently trading at around $28,200 on Thursday afternoon, up over 4% in the past 24 hours. Just hours earlier, BTC had jumped as high as $28,800 amid at least temporarily renewed confidence in riskier assets. The BTC/USD trading pair on the Coinbase exchange rose to $28,839 at one point, according to data from TradingView.
“The recent crypto rally has been fueled by bank runs that have led many to become skeptical of traditional banking, given all the vulnerabilities of deposit journeys,” Edward Moya, senior market analyst at forex market maker Oanda, wrote on Thursday. Moya believes BTC needs “a fresh catalyst” to break above $30,000 and enjoy a more extended rally.
Ether (ETH) jumped over 5% to recently trade at $1,818 on Thursday afternoon. The second largest cryptocurrency by market capitalization rose as high as $1,858 earlier in the day – its highest level since August.
Litecoin (LTC) recently rose 12% for the day to hover at $93. According to Coinglass data, traders liquidated around US$3 million in LTC short positions in the past 24 hours, sending the price up from about US$83 a day ago. Layer 1 blockchain Aptos’ native APT token rose over 7% to around $13.
“Thursday’s market rally came after investors had already ‘priced in’ the possibility that the Fed will not raise interest rates again this year,” said Eric Chen, CEO and co-founder of Injective Labs, the company behind the decentralized finance (DeFi) protocol Injektiv.
While Federal Reserve Chairman Jerome Powell offered no such assurances on Wednesday, the CME FedWatch Tool showed that 66% of traders currently do not expect a rate hike at the next FOMC meeting, which will take place in May.
In an email, Chen also told CoinDesk that “Fed concerns about inflation may have also driven interest in cryptocurrencies as a potential hedge against inflation.” He added that the market’s rise also coincided with news that Do Kwon, the founder of Terraform Labs, appears to have been arrested in Montenegro, which may have contributed to “short-term volatility.”
Meanwhile, equity markets also turned green, recovering some of their Wednesday losses. The S&P 500 and tech-heavy Nasdaq recently closed up 0.3% and 1%, respectively. The Dow Jones Industrial Average (DJIA) rose 0.2 percent.
