Thursday’s price pump in crypto comes following a rally in US equities as markets choose to look beyond the Fed rate hikes.
It seems that the crypto market has finally decided to look past the traditional market and chart its own trajectory. Earlier this week, the Federal Reserve announced a 25 basis points rate hike in its continued fight against inflation. Although the crypto market showed some consolidation earlier, it bounced back strongly on Thursday, March 22, after the news from the Fed. The Bitcoin price has jumped by more than 3% and is currently trading at $28,279 with a market cap of $546 billion. Well, if Bitcoin investors continue to show strength, $30,000 is quite within the reach. Some technical charts also suggest that a further rally to $34,000-$35,000 is possible.
#Bitcoin | Nothing has changed!
If this bullish megaphone is the governing pattern behind $BTC price action, we could target $34,000. https://t.co/gcF1LpGxQX pic.twitter.com/ulpF9DxFH3
— Ali (@ali_charts) March 23, 2023
Influence of the Fed News on Crypto
Some crypto industry insiders have turned ultra-bullish with Bitcoin’s recent performance and expect it to touch a new all-time high to touch $100,000 by the year’s end.
Other cryptocurrencies have joined the price rally as well with Ethereum (ETH) being up by 3.49% and currently trading at $1,814 and a market cap of $222 billion. Altcoins like Cardano (ADA), XRP, Dogecoin (DOGE), Solana (SOL) and Polygon (MATIC) have gained anywhere between 2-3% each.
The recent surge in the crypto space follows a strong rally on Wall Street, on Thursday. All top three US stock indices ended in the green during yesterday’s trading session. Fed Chairman Jerome Powell has hinted that the US central bank could pause interest rate hikes going ahead based on how the macro situation pans out in the country.
Uncertainty with Opportunity
The US labor market continues to remain strong while inflation continues to remain sticky. As the inflation continues to stay high at 6%, Powell has said not to expect any rate cuts this year in 2023. The interest rate hikes by the Fed led to a crisis-like situation in the banking space earlier this month. However, the Fed and the FOMC made a timely intervention to prevent the contagion from spreading further.
Sylvia Jablonski, CEO and chief investment officer at Defiance ETFs told CNBC that traders are weighing the Fed’s latest policy meeting. Jablonski added:
“The Fed did what the market wanted and suggested that ongoing rate hikes may not be needed and acknowledged the deflationary work that the recent bank collapses would contribute towards inflation reduction. A Fed that is looking to pause should spell positive momentum for risk and growth assets like tech stocks and crypto. … In short, uncertainty remains in monetary policy, and the impact of rates on the economy in terms of whether or not we see a recession.”
It will be interesting to see whether Bitcoin and crypto continue the momentum going for the rest of the year.
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