A recent unusual picture: the prices on the crypto market have risen significantly in the last 24 hours. The spin cycle seems to be paused for the time being, compared to the previous day, the total market capitalization has increased by eight percent to 1.1 trillion US dollars. Bitcoin (BTC) has risen by about nine percent in the last 24 hours to $23,234. Ethereum (ETH) is up 13 percent. Thus, the Ether price is currently 1,651 US dollars – the highest value since June 11.
Uniswap (UNI) has risen by around ten percent more. With a price increase of 24 percent, the UNIVERSITY price is currently trading at 8.26 US dollars. One reason for the price shift is also likely to be the vote on the user participation in the fees on the decentralized exchange. More about this here.
Fed rate hike gives the impetus
The trigger for the broad price increases was the renewed rate hike by the US Federal Reserve. The Fed announced an increase in the key interest rate by another 0.75 percent last night. Thus, the key rate is in a corridor between 2.25 and 2.5 percentage points.
This is the Fed’s fourth rate hike this year and probably not the last. According to Fed chairman Jerome Powell, the next hike could follow in September. With this, the monetary authorities want to counteract the recent sharp increase in inflation. The inflation rate in the US recently rose to 9.1 percent – the highest level in more than 40 years.
The Fed’s decision was positively received on the stock markets. ”The Nasdaq had the strongest daily rise since November 2020,“ says BTC-ECHO market expert Stefan Lübeck, ”because the Fed made only 75 basis points, instead of the feared 100″. Crypto was “torn up” with this.
However, crypto is not ”over the mountain” with it. ”In the last two interest rate increases, the first one was bought, but the day after that it was sold off again,” explains Lübeck. It remains to be seen how the crypto market behaves this time.
Crypto Market Remains a Roller Coaster Ride
Adam Sze does not believe that the situation on the crypto market will calm down in the foreseeable future. ”In the near future, the crypto market will be more volatile than before due to various macroeconomic factors,” the head of Digital Assets Products at Global X told BTC-ECHO. “These include, for example, the currently high inflation, rising interest rates and ongoing problems in the supply chains”.
The market is also struggling with “industry-specific problems such as the potential insolvency of well-known crypto companies and hedge funds”. This interaction has led to “investors shying away from risk and withdrawing from cryptocurrencies,” according to the financial expert.
On the other hand, the network data is positive. ”The on-chain data continues to be strong, especially with Bitcoin,” explains Sze. In the long term, the “prospects of cryptocurrencies continue to be very convincing”. In addition to Bitcoin, “smart contract protocols such as Ethereum are also increasingly being adopted by institutional investors”. Despite the tense market situation, Adam Sze therefore remains optimistic. Crypto is in a “bear market”. But these are also times “when you can build a lot”.
