Cryptocurrencies Rally As World Markets Anticipate Fed Rate Peak

Cryptocurrencies surged more than a percent in the past 24 hours as markets cheered the Fed’s interest rate action, widely perceived to be the end of the Fed’s tightening cycle. The Fed on Wednesday raised the target range for the federal funds rate to 5.25 to 5.50 percent, the highest in 22 years.

The Fed reiterated the assurance that it would continue to take cognizance of the cumulative tightening of monetary policy, monetary policy lags, readings on labor market conditions, inflation pressures and inflation expectations, as well as financial and international developments in deciding the future of monetary policy. The Fed chair stressed on a meeting-by-meeting assessment for future action.

Markets overwhelmingly expect the current level to be the peak of the Fed’s interest rates. Going by the CME FedWatch tool, the probabilities assigned to another quarter-point rate hike is only 20 percent in September, 30 percent in November and 28 percent in December. Markets are even assigning a 24-percent probability for a quarter point rate cut in January.

The ECB also, as widely expected raised rates by a quarter percentage in its meeting on Thursday.

Advance estimates released just a while ago by the U.S. Bureau of Economic Analysis showed the U.S. economy grew at 2.4 percent in the second quarter of 2023, versus 2 percent in the previous period and much more than 1.8 percent that the markets were expecting.

Overall crypto market capitalization is currently at $1.19 trillion, versus $1.18 trillion a day earlier.

Bitcoin (BTC), the leading cryptocurrency has gained 0.68 percent overnight to trade at $29,460.25. The 24-hour trading range was between $29,675.55 and $29,218.70. Though year-to-date gains exceed 77 percent, the dominant cryptocurrency has shed 1.5 percent in the past week and 3.8 percent over the past 30 days.

Ethereum traded between $1,886.97 and $1,854.85 in the past 24 hours. It is currently changing hands at $1,875.70, having added more than a percent overnight. Ether is however grappling with losses of 1.5 percent over the past week. Year-to-date gains exceed 56 percent.

Bitcoin dominates more than 48 percent of the overall crypto market followed by Ethereum which accounts for a little less than 19 percent.

4th ranked XRP (XRP) gained 1.9 percent in the past 24 hours. The cryptocurrency has shed 10 percent in the past week, dragging the year-to-date gains to 111 percent. The cryptocurrency is currently changing hands at $0.7156, versus the recent high of $0.8875 touched in the aftermath of the favorable win against SEC.

5th ranked BNB (BNB) gained 1.5 percent overnight and 0.1 percent in the past week. It is however trading with losses of more than a percent on a year-to-date basis.

7th ranked Dogecoin (DOGE) is trading close to the flatline. It has added 15 percent in the past week and 13 percent in 2023.

8th ranked Cardano (ADA) has gained 2 percent overnight and 9 percent over the past 30 days. It is still saddled with weekly losses of close to 2 percent.

9th ranked Solana (SOL) has added 2.8 percent overnight. Though weekly losses exceed 3 percent, year-to-date gains are more than 150 percent, which is highest among the top 10 cryptos.

10th ranked TRON (TRX) has gained 1 percent overnight and 3.5 percent over the past week.

20th ranked Stellar (XLM) topped the price charts with an overnight rally of close to 15 percent. 46th ranked XDC Network (XDC) added 13 percent overnight, followed by 72nd ranked Pepe (PEPE) that gained more than 12 percent.

16th ranked Toncoin (TON), 52nd ranked Theta Network (THETA) and 91st ranked Trust Wallet Token (TWT) are the only cryptocurrencies among the top 100 that have declined more than 1 percent in the past 24 hours.

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