Cryptocurrencies extended their rally Wednesday, while equities took a dive into the red as investors focused on Washington for signs of interest rate changes. Bitcoin (BTC) rose another 5% in New York, extending its gains and putting the crypto at more than 13% higher over the past five days. Bitcoin briefly surpassed $30,000 before dipping slightly lower and was trading around $29,870 at the time of publication.
On the other hand, Ether (ETH) gained 3% on Wednesday and is now up close to 8% since June 17. However, equities erased modest gains seen over the past couple of trading days, with the Nasdaq Composite and S&P 500 indexes posting losses of 0.7% and 0.5% respectively on Wednesday.
Markets will be keeping a keen eye on the Federal Reserve, looking for signs that it is done or almost done hiking interest rates. Confirmation of this during Fed Chair Jerome Powell’s first day of Congressional testimony should be enough to push stocks back into the green. “The consensus view is that Fed Funds are at or very near their peak,” said DataTrek Research founder Nicolas Colas, adding that markets have gotten this call wrong several times over the last year, but this time they may not be wrong.
In terms of crypto, there should be steam left in the rally, according to analysts. Bitcoin soared above $29,000 for the first time since May, surpassing a key resistance level that analysts have been watching. This move could be related to apparent increased institutional interest as more traditional firms have moved to file for bitcoin spot ETF products and an international bank makes moves into the space.
“Banco Santander, the largest bank in Spain, the fourth-largest in Europe, and one of the largest in the world, tweeted about Bitcoin’s Lightning Network from its main handle,” said Noelle Acheson, author of Crypto is Macro Now and former head of market insights at Genesis. “It’s linking to an article in a series on digital assets on its website, but it’s notable that this promotion wasn’t siphoned off into a digital assets division.”
BlackRock proposed the launch of an iShares Bitcoin Trust, signaling that the firm saw a chance for approval. While crypto still needs more than favorable macroeconomic tailwinds and institutional inflows into Bitcoin, analysts from Matrixport believe this is a welcoming development that reminds investors that crypto is here to stay.
As the market awaits Powell’s testimony and its possible impact, the rise in Bitcoin’s price and recent institutional interest could indicate a shift in sentiment towards the longevity of cryptocurrency. However, investors should remain cautious as the market is subject to sudden changes based on political and economic factors.
Source: Blockworks
