Bitcoin’s Potential Breakout Amid Interest Rate Hike and WallStreetBets Token Collapse

Abstract cryptocurrency landscape, futuristic city skyline, Bitcoin symbol rising, warm sunset hues, intense upward beams of light, shadows elongating, contrasting mix of calm and anticipation, U.S. Federal Reserve building subtly present, WallStreetBets token falling, ethereal digital atmosphere, hint of volatility.

Bitcoin has managed to climb above $29,000 following the U.S. Federal Reserve’s decision to raise interest rates by 25 basis points last Thursday. Analysts now speculate on the possibility of a strong upward breakout after the crypto experienced over a month of trading within a narrow range. Crypto services provider Matrixport believes that if Thursday’s rate hike marks the end of this cycle, we could see Bitcoin rally by 20% to $36,000. Though trading volumes have seen a slight dip, Matrixport’s research note suggests minimal resistance along the path to higher valuations.

As we approach the end of the recent earning seasons, stock buybacks are set to resume, providing a tailwind for stocks and risk assets. Blockchain enthusiasts closely monitored the U.S. Securities and Exchange Commission’s (SEC) latest hedge fund ruling for signals of a more crypto-friendly regulatory environment. While the SEC decided not to include a definition of digital assets in their proposal, former SEC official Anne-Marie Kelley believes that recognizing digital assets would weaken the regulatory body’s argument that they should be categorized as securities.

Meanwhile, the WallStreetBets token (WSB) saw a massive 90% drop in value within just 24 hours, following a significant market cap boost to $50 million in under three days. The sudden decline came after an insider connected to the project, @zjzWSB, traded a large number of tokens in exchange for 334 ETH (approximately $635,000). Blockchain expert @ZachXBT was the first to report the transactions on Twitter, igniting a wave of subsequent selling and contributing to the token’s sharp decline.

Users had initially received WSB tokens equivalent to nearly seven ether just by pasting their crypto wallet addresses on Twitter. This clever marketing tactic helped the tokens garner attention and gain traction within the recent memecoin frenzy. However, it’s essential to appreciate that the crypto market is often volatile and unpredictable, with the potential for abrupt gains and losses.

In other market news, the current U.S. recession probability, based on Federal Reserve Chairman Jerome Powell’s preferred near-term forward spread, has surged to 94% – the highest ever recorded. This surpasses previous peaks seen before the coronavirus-induced crash, the sub-prime crisis, and the dot-com bubble. As the market undergoes these rapid shifts, investors must remain vigilant and informed while making investment decisions in the ever-changing world of cryptocurrencies and blockchain technology.

Source: Coindesk

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