© Reuters.
Investing.com– Bitcoin’s price rose Thursday after the Federal Reserve struck a less hawkish tone than markets expected, with broader cryptocurrencies also rising as the dollar weakened and that traders bet that there would be no more interest rate hikes.
The rose almost 4% to $35,808, its highest level since May 2022. The world’s second-largest cryptocurrency rose 3% to $1,866.19, a nearly three-month high.
The crypto market was largely encouraged by a weaker dollar and falling yields, after Wednesday, as expected. The slipped more than 0.5% in Asian trading on Thursday.
Fed Chairman Jerome Powell took a seemingly less hawkish tone on future rate hikes. Although he left the door open for another rate hike this year, Mr. Powell also acknowledged that monetary conditions had tightened significantly in recent months. Markets interpreted this statement as a signal that the Fed may no longer raise rates and could start cutting them by mid-2024.
This idea prompted operators to abandon the dollar in favor of risky assets, which benefited cryptocurrencies.
Bitcoin broke the $35,000 mark for the first time since May 2022. A series of high-profile bankruptcies in the cryptocurrency market – including those of , Three Arrows Capital and especially FTX – led to a sharp drop in prices cryptocurrencies over the past year. The world’s largest cryptocurrency token has fallen as low as $15,000 by the end of 2022.
The token has been on a roll in recent weeks, benefiting greatly from speculation that an exchange-traded fund that directly tracks the price of bitcoin will soon be approved on U.S. markets.
The applications from Grayscale, Ark Ventures and, above all, the world’s number one asset manager BlackRock Inc. (NYSE:) are currently being examined by the Securities and Exchange Commission.
However, much of these gains also appear to be due to a drastic drop in liquidity as retail interest in the crypto space has continued to decline. Bitcoin trading volumes have fallen sharply from 2021 highs.
On the technical side, bitcoin also appeared poised to make up for much of the decline it suffered over the past year’s bear market.
“A few hundred dollars higher, at $36,000, is the 38.2% retracement of the bear market decline from $69,000 to $15.5,000,” said Tony Sycamore, market analyst at IG, in a tweet.
Cryptocurrency markets were also awaiting quarterly results from the leading exchange Coinbase Global Inc (NASDAQ:), which are expected later this Thursday.