28.07.202223:34 Forex Analysis & Reviews: The cryptocurrency market is euphoric, BTC and ETH have soared to price peaks

Bitcoin started with a sharp upward leap on Thursday morning, by the time of writing its value is balancing at around $ 22,870.

According to the website for tracking the value of digital assets CoinMarketCap, bitcoin has risen in price by 9.5% over the past day. At the same time, on Wednesday evening, the cryptocurrency instantly soared from $21,600 to a price peak of $23,415, i.e. by more than 8% in just a few hours.

The key reason for the spectacular rise in the digital asset market was the decision made the day before by the US Federal Reserve. Following the meeting on July 26-27, the US central bank raised the interest rate by 0.75 percentage points to 2.25–2.5% per annum.

The final increase in the base rate was within the expectations of the participants of the cryptocurrency market, so it reacted to the Fed's decision with a confident growth. At the same time, experts believe that a negative scenario for the participants of the crypto community could only be an increase in the interest rate by 1% at once.

Additional confidence in investors was also inspired by the speech of Fed Chairman Jerome Powell at a press conference following the central bank meeting. At it, he said that the Fed plans to continue to resist record inflation and return it to the 2% level, without bringing down the economy of the United States. Investors took this message as a potential promise of monetary policy easing in the future.

In addition, the head of the department said that plans to reduce the balance sheet of the US central bank remain in force and from September the volume of stock sales will be doubled to $95 billion per month.

Powell assured the audience that the world economy has not yet fallen into recession, and pointed to the strength of the labor market, which has already created 2.7 million new jobs in 2022.

In their report published the day before, analysts of the analytical company Kaiko talked about the high correlation of the value of bitcoin with the decisions of the Fed, which was recorded in the summer of 2021.

So, when in March 2022, for the first time since 2018, the Fed raised the base rate by 50 percentage points to 0.25-0.5%, the cryptocurrency market reacted to the decision with growth.

In May of this year, after the Fed raised the rate range to 0.75-1% per annum, the value of the first cryptocurrency sharply overcame the level of $40,000, but on the same day it fell below $36,000, launching the process of a protracted correction.

In June, when the US central bank raised the key rate by 75 basis points for the first time since 1994, BTC immediately reacted with a spectacular rise to $22,000, and then a collapse to $18,000.

Experts are confident that in the coming months, the digital asset market will respond even more strongly to the speeches of the world's central banks, because often an increase in the interest rate sharply reduces the ability of investors to invest in risky assets such as virtual currency.

Amid a sharp rise in quotes to a price peak of $23,400 the day before, analysts predicted further short-term growth for digital gold to $23,700-$24,000, which will become another resistance level for the main cryptocurrency before the high of $24,300 reached last week.

Altcoin Market

Bitcoin's main competitor, the altcoin Ethereum, also started Thursday's trading session with a steady increase and by the time of writing it had risen to $1,667.

Over the past 24 hours, the coin has added 16.6% in value.

As for cryptocurrencies from the top 10 by capitalization, over the past 24 hours, all coins, except for Binance USD, were traded in the green zone.

Within the past week, almost all digital assets from the strongest ten also grew in price. Losses here were recorded only for Dogecoin (-3%) and Solana (-1.52%).

According to the world's largest virtual asset data aggregator CoinGecko, over the past 24 hours, among the top 100 most capitalized digital assets, the list of leaders was topped by the Lido DAO coin (+42.2%).

According to the results of the past week, Bitcoin Gold (+49.2%) showed the best results among the hundred strongest cryptocurrencies, and Amp (-7.4%) showed the worst results.

According to CoinMarketCap, a website for tracking the value of digital assets, over the past day, the total capitalization of the crypto market has skyrocketed by 8% and is above $1.1 trillion at the time of writing.

At the same time, this indicator was below the important key mark of $1 trillion and balanced at $983 billion on Wednesday.

Cryptocurrency market participants are focused on the preliminary report on US GDP statistics for the second quarter of 2022, which is scheduled for release on Thursday.

Analysts expect the second negative value since the beginning of the year, which will be a confirmation of the entry of the US economy into a recession phase.