Fed rally in crypto

Bitcoin is close to its highest level since August as investors read Fed Leader Jerome Powell’s comments on the development of inflation as a sign that he will follow a more measured monetary policy in the future.

Bitcoin has reached its highest level since August, climbing over 24 thousand.

Following the 25 basis point rate hike, Fed Leader Jerome Powell’s assessments increased the optimism that the Fed will follow a more measured monetary policy in the future, and accordingly, the risk appetite.

“Cryptocurrencies are rising as risk appetite rises following the Fed’s overnight dove comments,” said Cici Lu, Founder of Venn Link Partners. He added that he has detected more purchases by corporate customers in recent weeks.

Last year, the crypto market was marked by massive losses following events such as the collapse of the FTX Exchange.

“Usage, adoption and innovation continue to paint a much more positive picture than pricing and investor sentiment reflects,” said Richard Galvin, co-founder of Fund Manager Digital Asset Capital Management.

Galvin said that he is not convinced that crypto will remain highly correlated with the macro outlook, arguing that segment-specific factors will have more influence.

On the other hand, chart analysts highlighted the levels around $25,000 as regions where the Bitcoin rally may fail. Mark Newton, Fundstrat’s technical strategy lead, marked $25,200 as a potential resistance area.

For now, virtual assets seem to have turned their heads thanks to the dovish comments from Fed statements, while smaller tokens such as Avalanche, Aave, Polygon and Binance Coin are gaining attention amid the best performers on Thursday.