Bitcoin (BTC) climbs over $ 23,000

Bitcoin (BTC) climbs over $ 23,000

The world’s largest cryptocurrency has fallen by about 50% since the beginning of 2021.

CFOTO | Future Publishing | Getty pictures

Bitcoin broke the $ 23,000 threshold for the first time in more than a month, when hopes of an interest rate hike that was less aggressive than feared by the Federal Reserve triggered a easing in cryptocurrencies.

The world’s largest cryptocurrency rose as high as $ 23,800 on Wednesday, up 8% in 24 hours and traded at levels not seen since mid-June. It was last traded at a price of $ 23,330.80, according to Coin Metrics data.

Traders consoled themselves with the prospect of softer political action from the Fed at its next interest rate meeting.

The effects of tighter monetary policy from the US Federal Reserve have weighed heavily on risky assets such as equities and crypto.

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

“This is not necessarily the end of the cryptocurrency market, but a relief rally for Bitcoin is long overdue,” said Antoni Trenchev, CEO of cryptocurrency lender Nexo.

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

The US Federal Reserve is expected to raise interest rates again at its next board meeting, but economists predict a less aggressive increase this time of 75 basis points instead of 100.

Cryptocurrencies were identified as a source of value uncorrelated with traditional financial markets. But as institutional capital flowed into digital assets, this thesis failed to materialize when the Fed began to raise interest rates and traders fled stocks.

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

“The market needs a little more security to slow down the rate of increase in interest rates from the Fed,” he said. “Still, a short-term outlook for bitcoin is bullish and it could go as high as around $ 29k this week.”

Meanwhile, traders are betting that the worst of an intense market contagion caused by liquidity problems at some large crypto companies has probably subsided.

Digital currencies have been under enormous sales pressure in the last few months, as the collapse of some notable businesses caused ripple effects in the market. Terra, a so-called algorithmic stablecoin, plunged to near zero in May, launching a chain of events that eventually led to the bankruptcies of crypto firms Celsius, Three Arrows Capital and Voyager.

Ethereum ‘Merge’

Elsewhere in crypto, ether climbed more than 1% to $ 1,543.76, while other so-called “altcoins” were also higher.

The second largest token has increased by more than 40% in the last seven days, driven by optimism over a long-awaited upgrade of the network known as “Merge”.

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

“Cryptography has been widely criticized for contributing to climate change due to its energy-intensive nature, and as forest fires are raging across Europe and the United States, the promise that Ether transactions may be less harmful to the environment has caused a surge of interest,” said Susannah. Streeter, senior investment and market analyst at Hargreaves Lansdown.

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