Bitcoin (BTC)’s extraordinary rally was showing signs of weakness this week, but last night’s rather dovish outlook from the US Federal Reserve has injected renewed bullishness into the spot markets.
The Fed implied that interest rate cuts could be on the agenda for 2024, even as it held the bank rate at a 22-year high of 5.5% for now.
As Jim Reid at Deutsche Bank (ETR:DBKGn) put it: “Yesterday’s FOMC meeting did its best to give investors an early Christmas present, all packaged with a bow and extra special gift wrapping.”
For bitcoin, that early present sent the world’s largest cryptocurrency 3.3% higher, with momentum maintained this morning.
At the time of writing, the BTC/USDT pair was swapping for $42,910, up from early-week lows closer to $40,200.
However, there are still around 200 basis points to go before bitcoin heads back into the week-on-week green.
Bitcoin is nearly 2% lower week on week – Source: tradingview.com
Ethereum (ETH) steered 2.5% higher on Wednesday and another 0.9% this morning, bringing its spot price to $2,282.
In the broader altcoin market, Cardano (ADA) kicked into overdrive with a 15% overnight rally, bringing the Layer-2 blockchain token to a six-month high.
Solana (SOL), Avalanche (AVAX) and Polkadot (DOT) were also on the front foot, adding high single digits to their respective market capitalisations.
Global cryptocurrency market cap surged 4.5% overnight to $1.61 trillion, with bitcoin dominance at 53.3%.
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