Bitcoin (BTC) voiced a sigh of relief following the Federal Open Market Committee’s decision to halt further interest rate hikes on Wednesday.
Though a pause was universally expected, the market reacted positively anyway, with the BTC/USDT pair reaching a new year-to-date high just shy of $36,000 in hours following the rate call.
Bitcoin went into correction mode this morning though, falling back to $35,236 at the time of writing.
Fresh buy orders have gathered at the 35k price point, per Binance’s order book, suggesting the possibility of bitcoin sticking above this support line.
As the second-to-last month of the year kicks into gear, the market is mulling what’s in store next.
Steadily declining US inflation (down to 3.7% from 6.4% earlier this year) has taken the pressure off further rate hikes, which is a positive development for risk assets like bitcoin.
The prospect of sweeping approvals of spot bitcoin exchange-traded funds is also on the horizon, acting as a potential tailwind.
“After the latest runup in price, Bitcoin sits at a crossroads,” Grayscale’s research team commented. “On the one hand, technology-oriented assets are under pressure from Federal Reserve tightening and other macro risks.
“Bitcoin and other crypto assets have been loosely correlated with technology stocks over the last few years, suggesting the latest drawdowns could spill over into digital assets if they were to continue.”
However, Grayscale pointed to building demand for safe haven and “store of value” assets amid falling asset market valuations, vulnerable economies, and geopolitical tensions.
“Bitcoin has benefited from these trends, in our view, as well as from expectations for spot ETF approval in the United States,” said researchers.
Can bitcoin remain 100% higher in 2023? – Source: tradingview.com
Bitcoin remains a true outperformer against the second-largest cryptocurrency Ethereum (ETH), with the ETH/BTC pair trading at lows last seen in mid-2021.
Yet ether was buoyed following yesterday’s FOMC call, rallying nearly 2% before topping $1,875 this morning.
The ETH/USDT pair has since fallen back to $1,830.
In the broader altcoin space, Solana (SOL) remains easily the top performer among the blue chips, rallying an impressive 35% across the past seven days.
Ripple (XRP) has gained high single digits, while BNB, Cardano (ADA) and Toncoin (TON) have been relatively muted
Global cryptocurrency market capitalisation shot above $1.3 trillion overnight, with bitcoin dominance hovering just below 54%.
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