Bitcoin Soars Near High Since August In Post-Fed Crypto Jump
(Bloomberg) – Bitcoin hovered near the highest since August as investors took Federal Reserve Chairman Jerome Powell’s comments on inflation progress as a sign that a less tight monetary policy backdrop is announced.
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The largest token rose 2.4% before paring some of the gain to trade at $23,880 at 5:20 a.m. Thursday in London. Smaller tokens also rose, including a 2.5% rise in Ether. A top 100 coin gauge is up 37% in 2023.
A range of investments from stocks to bonds and crypto rose after Powell said the disinflation process was underway. It has not aggressively pushed back a rally in global markets this year that has eased financial conditions, which may make it harder to moderate price pressures.
Powell was speaking after the Fed downgraded as expected to a quarter-point interest rate hike. He said policymakers expected to deliver “a few” more rate hikes before pausing their aggressive tightening campaign.
“Cryptocurrencies are rallying on risk sentiment after dovish comments from the Fed overnight,” said Cici Lu, founder of Venn Link Partners, a blockchain advisor. She added that she has detected more purchases by institutional clients in recent weeks.
Digital assets are rebounding from the steep losses of the past year, a period marked by blowouts like that of the FTX exchange.
“Usage, adoption and innovation remain a much more positive picture than prices and investor sentiment reflected,” said Richard Galvin, co-founder of fund manager Digital Asset Capital Management.
Galvin said he was not convinced that crypto would remain strongly correlated to the macro landscape, arguing that sector-specific drivers would wield more influence.
For others, digital assets are vulnerable to any sign that borrowing costs need to rise for longer if inflation proves persistent.
Chart analysts have highlighted levels around $25,000 as areas where Bitcoin’s rally could break down. An example is Mark Newton, Head of Technical Strategy at Fundstrat, who flagged $25,200 as a potential resistance zone.
For now, virtual assets are riding high thanks to dovish interpretations of the Fed’s messages. Smaller tokens such as Avalanche, Aave, Polygon, and Binance Coin were among the best performers on Thursday.
For crypto market prices: CRYP; for the best crypto news: TOP CRYPTO.
–With help from Sunil Jagtiani, Akshay Chinchalkar and Joanna Ossinger.
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