For the first time in more than a month, Bitcoin crossed the $24,000 mark as relief in cryptocurrencies sparked expectations of a Federal Reserve rate move that will be less draconian than anticipated.
According to statistics from Coin Metrics, the biggest cryptocurrency in the world rose as high as $24,047 on Wednesday, rising more than 8% in a single day and trading at levels last seen in mid-June.
The likelihood of the Fed adopting a looser policy at its upcoming rate-setting meeting gave traders hope.
Risky assets like equities and cryptocurrencies have been negatively impacted by the U.S. central bank’s stricter monetary policies.
The price of bitcoin has decreased by almost 50% since the year 2021 began.
After a rocky month, “Bitcoin is starting to find its feet, and the next week will be telling,” he continued.
At its upcoming policy meeting, the U.S. central bank is anticipated to raise rates once again, although analysts anticipate a less pronounced increase of 75 basis points rather than 100.
The value of cryptocurrencies was hailed as being unrelated to conventional financial markets. However, as institutional money rushed into digital assets as interest rates started to rise and traders abandoned stocks, that premise was proven false.
According to Yuya Hasegawa, crypto market analyst at Japanese crypto exchange Bitbank, a climb over $22,700 indicates that the cryptocurrency has now regained its 200-week moving average, setting up the technical parameters for a “trend reversal.”
The market requires a bit more certainty that the Fed would slow down the pace of rate increases, he added.
The bankruptcy of a few high-profile businesses in recent months has had a significant negative impact on the price of digital currencies. A so-called algorithmic stablecoin named Terra crashed to almost zero in May, triggering a series of events that finally resulted in the failure of cryptocurrency companies Celsius, Three Arrows Capital, and Voyager.
The second-largest token has increased by more than 50% over the past week on the back of excitement surrounding the “Merge,” a much-anticipated network update.
The upgrade, which will transition Ethereum from questionable crypto mining to a more energy-efficient approach, is now anticipated to be finished by September 19.
