Bitcoin (BTC) Rise Above $23,000

Bitcoin It broke the $23,000 threshold for the first time in more than a month, as hopes for a less aggressive rate hike than feared by the Federal Reserve led to a sudden rally in cryptocurrencies.

The world’s largest cryptocurrency surged to $23,800 on Wednesday, up 8% in 24 hours and trading at levels not seen since mid-June. It recently traded at $23,330.80, according to Coin Metrics data.

Traders were relieved by the prospect of softer action from the Federal Reserve at its next rate-setting meeting.

The effects of tight monetary policy from the US central bank have significantly affected risky assets such as stocks and cryptocurrencies.

Bitcoin is still down nearly 50% since the beginning of 2021.

“This is not necessarily the end of the bear market for cryptocurrencies, but Bitcoin’s recovery is long overdue,” said Anthony Trenchev, CEO of crypto lender Nexo.

“Bitcoin is starting to find its feet after a shaky month, and next week will tell,” Trenchev said.

The US central bank is expected to raise interest rates again at its next policy meeting, but economists expect a less aggressive Increase this time by 75 basis points instead of 100.

Cryptocurrencies have been promoted as a source of value unconnected to traditional financial markets. But with institutional capital pouring into digital assets, this thesis failed to materialize once the Federal Reserve started raising interest rates and traders fled stocks.

A rally above $22,700 means the cryptocurrency has now reclaimed its 200-week moving average, laying the technical basis for a “trend reversal,” according to Yuya Hasegawa, crypto market analyst at Japanese crypto exchange Bitbank.

“The market needs more emphasis on the slow pace of interest rate hikes by the Fed,” he said. “However, the short-term outlook for Bitcoin is bullish and could rise to around $29,000 this week.”

Meanwhile, traders are betting that the worst of the severe market contagion caused by the liquidity issues of some of the big crypto companies could happen. calmed down.

Cryptocurrencies have come under massive selling pressure in the past couple of months, as the collapse of some high-profile projects has caused a ripple effect in the market. Tera, the so-called stable algorithm, to nearly zero in Maywhich led to a chain of events that eventually led to Crypto bankruptcy Celsius, three stocks, Capital and Voyager.

Elsewhere in cryptocurrency, ether It rose more than 1% to $1543.76, while other so-called “altcoins” also rose.

The second largest token has surged more than 40% in the past seven days, fueled by optimism about the upcoming upgrade of its network known as “merging.”

Developers now expect the update, which will move Ethereum away from environmentally questionable mining to a more energy-efficient system, to be completed by September 19.

“Cryptocurrency mining has been heavily criticized for its contribution to climate change due to its energy-intensive nature and with wildfires raging across Europe and the United States, the promise that Ether transactions can be less harmful to the environment has led to a flurry of interest,” he said. Susanna Streeter, senior investment and markets analyst at Hargreaves Lansdown.