Crypto Prices Bullish Once More – What's Fueling the Recovery? – Cryptonews
Prices of major cryptocurrencies are again looking bullish, as traders eye hope that inflation has peaked, and attention shifts to the next US interest rate announcement.
The bullish price action in bitcoin (BTC), ethereum (ETH) and other major coins today came despite a more hawkish tone than expected from Federal Reserve chair Jerome Powell during his press conference on Wednesday this week:
“It is very premature to be thinking about pausing. People when they hear ‘lags’ think about a pause. It is very premature, in my view, to think about or be talking about pausing our rate hikes. We have a ways to go,” Powell said at the time.
That compared to the written Fed statement, which was interpreted by most observers as being more dovish than before, leaving traders somewhat confused about the Fed’s messaging.
Among other things, the statement said the Fed “will take into account the cumulative tightening of monetary policy,” as well as “the lags with which monetary policy affects economic activity and inflation” when it decides on its next step.
The Fed’s next interest rate announcement is expected on December 14.
And while the comments from Powell were enough to send bitcoin and the broader crypto market lower on Wednesday, things started to return to cautious optimism again on Thursday and Friday, when bitcoin posted gains.
In addition to the Fed statement, crypto markets are also supported by a sense that the worst could be over for inflation. That, in turn, is believed to be necessary for the Fed to pause its rate hikes, and eventually start cutting again.
As is widely known by know, bitcoin and crypto in general tends to follow stocks and their ‘risk-on’ and ‘risk-off’ sentiment. Unsurprisingly, a pause in rate hikes would therefore be considered very bullish for the crypto market.
The strong link between the Fed’s actions and crypto prices have also been pointed to by several heavyweight investors in the space, including Galaxy Digital CEO Mike Novogratz. Speaking at the Bitcoin 2022 conference in Miami in April this year, Novogratz made it clear that “once the Fed pauses, I think bitcoin is going to the moon.”
Asked at the same conference how high bitcoin will ever go, Novogratz replied “a million dollars.”
“I pray that the dollar stays strong and bitcoin doesn’t go to infinity. If bitcoin goes to infinity, it would mean all stability is gone in the West,” Novogratz also told the audience.
As of 14:00 UTC on Friday, bitcoin had traded as high as $20,888 for the day, before falling slightly to a current price of $20,755. The coin was up 2.5% for the past 24 hours and 2.1% for the past 7 days.
A quick 3min read about today's crypto news!