Bitcoin Holds Steady Above $28K, Ether Rises in Post-Rate Hike Rally

Bitcoin jumped above $28,800 earlier Thursday before retreating. Ether rose above $1,850, its highest level since August.

AccessTimeIconMar 23, 2023 at 8:31 p.m. UTC
Updated Mar 23, 2023 at 8:50 p.m. UTC

Bitcoin (BTC) was hovering above $28,000 Thursday as major cryptocurrency assets shrugged off the U.S. Federal Reserve’s 25-basis point rate hike and ongoing concerns about the banking sector and future monetary policy decisions.

BTC, the largest cryptocurrency by market capitalization, was recently trading at around $28,200 Thursday afternoon, up over 4% in the past 24 hours. Just hours earlier, BTC had jumped as high as $28,800 amid at least temporarily renewed confidence in riskier assets. The BTC/USD trading pair on the Coinbase exchange rose to $28,839 at one point, according to data from TradingView.

"The recent crypto rally has been fueled by bank runs that have led many to become skeptical with traditional banking, given all the vulnerabilities with deposit flights," Edward Moya, senior market analyst at foreign exchange market maker Oanda, wrote Thursday. Moya believes that BTC needs "a fresh catalyst" to break above $30,000 and enjoy a more extended rally.

Ether (ETH) jumped over 5% to recently trade at $1,818 Thursday afternoon. The second-largest cryptocurrency by market value surged as high as $1,858 earlier in the day – its highest level since August.

Litecoin (LTC) recently rose 12% for the day to hover at $93. According to Coinglass data, traders liquidated some $3 million of LTC short positions over the past 24 hours, sending the price up from roughly $83 a day ago. Layer 1 blockchain Aptos’ native APT token was up over 7% to sit around $13.

The CoinDesk Market Index, which measures overall crypto market performance, recently climbed around 1%.

"Thursday’s market rally came after investors had already 'priced in' in the possibility that the Fed will not raise the interest rate again this year, said Eric Chen, CEO and co-founder of Injective Labs, the company behind the decentralized finance (DeFi) protocol Injective.

While central bank Chair Jerome Powell gave no such assurances on Wednesday, the CME FedWatch Tool showed that currently 66% of traders are not expecting a rate hike at the next FOMC meeting, which will take place in May.

In an email, Chen also told CoinDesk that “the Fed’s concerns about inflation may have also fueled interest in cryptocurrencies as a potential hedge against inflation.” He added that the market's spike also coincided with news that Do Kwon, the founder of Terraform Labs, appears to have been arrested in Montenegro, which may have contributed to "short-term volatility."

Meanwhile, equity markets also turned green, recovering some of their Wednesday losses. The S&P 500 and tech-heavy Nasdaq recently closed up 0.3% and 1%, respectively. The Dow Jones Industrial Average (DJIA) was up 0.2%.


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Jocelyn Yang

Jocelyn Yang is a markets reporter at CoinDesk. She is a recent graduate of Emerson College's journalism program.

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