Crypto Altcoins Pop as Post-Fed Rally Sweeps in Risk Assets
(Bloomberg) – Beat-down cryptocurrencies rallied on Thursday amid relief in global markets after Federal Reserve Chairman Jerome Powell indicated that a series of super-sized interest rate hikes is unlikely.
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From bitcoin to smaller and sometimes lesser-known tokens – so-called altcoins – pushed higher, breaking a long period of pain that contributed to the more than $1 trillion drop in crypto market cap this year.
Bitcoin surged for the first time in 10 days, up 6.1% to $22,950. Ether rose 6.6% at one point to $1,256. Cardano, Solana and Dogecoin posted gains between 4.5% and 11% in Singapore as of 9:10 am.
After barely stomach losses in the crypto space over the past month, one’s guess is how long the rebound will last. Many have welcomed the excesses and skyrocketing speculation.
“The reality is that we need to look at dedication, where the ‘noobishness’ washes away,” said Max Gokhman, chief investment officer at Alphatrai. needs to be done, and I think it is in the process of doing that.”
As crypto began to slip late last year on less favorable Fed expectations, rising interest rates hurt the industry and its prospects.
Tera, Celsius
Last month’s collapse of the Terra blockchain and the recent decision by crypto lender Celsius Network Ltd to halt withdrawals have also taken a toll, while this week a tweet by crypto hedge fund co-founder Three Arrows Capital fueled speculation that it would The loss was a big loss.
According to researcher Glassnode, even long-term holders who have so far avoided selling are coming under pressure.
“Crypto is a risk asset. It is an expression of where people are on the risk spectrum, whether they are playing more risky or if they are playing more risky ones,” Anna Han of Wells Fargo Securities LLC said in an interview. be.
further decline?
Intensifying the fight against inflation, the Fed raised rates by 75 basis points on Wednesday. Powell indicated another large increase in July, but “today’s 75 basis-point increase is unusually large and I don’t expect a move of this size to be normal.” It leans against the risk of a string of jumbo moves.
All kinds of wallets in crypto are surrounded by negative events. Several crypto firms have announced layoffs and hiring freezes, and many market watchers expect further price drops.
Michael Purves, founder and CEO of Tollbacken Capital, sees that risk for bitcoin. “We think the broader picture of bitcoin is bearish, and perhaps our $15k target is not bearish enough,” he wrote in a note. “Still, for the short term, we recommend taking profit on short positions.”
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