Bitcoin edged higher for a third day following reassurance from Federal Reserve Chairman Jerome Powell that the US economy was strong enough to weather tightening monetary policy.
Bitcoin gained about 0.6% to $40,997 in evening trade. The price had spiked during Asian trading, only to erase gains after the Fed’s decision was announced. Other tokens such as Ethereum and Solana also gained. Bitcoin is down about 12% this year.
Bitcoin had spent the past few days mired in the tightest trading range since October 2020, a phenomenon some market watchers ascribed to long-term holders stepping in to buy whenever the token dips. Meanwhile, selling by short-term investors has kept Bitcoin and other digital assets from mounting sustainable gains.
A sustained rally is unlikely while the Fed tightens through the year, billionaire cryptocurrency investor Michael Novogratz who heads Galaxy Digital Holdings Ltd. said Tuesday during a TV interview on Bloomberg Crypto. Bitcoin is likely to stay in a range of $30,000 to $50,000 in an environment of rising interest rates, he said.
Policy makers led by Chair Jerome Powell voted 8-1 to lift their key rate to a target range of 0.25% to 0.5%, the first increase since 2018, after two years of holding borrowing costs near zero to insulate the economy from the pandemic.
On the other hand, Ether, the coin linked to the ethereum blockchain and the second-largest cryptocurrency in terms of market capitalization, also gained over 4% to $2,811. Dogecoin price surged more than 2% to $0.117360 whereas Shiba Inu was trading almost nearly 2% higher at $0.00002253.
The performance of other digital tokens were improed as Polygon, Litecoin, Stellar, Uniswap, Solana, Polygon, Polkadot, Cardano surged over the last 24 hours while Terra slipped. Meanwhile, the global cryptocurrency market capitalisation rose even as it remained below the $2 trillion mark at $1.91 trillion, more than 2.3% change in the last 24 hours, as per CoinGecko.
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