Demand for bitcoin was supported by the strengthening of stock indices and the weakening of the dollar, analysts said.Read MoreFeedzy
Bitcoin (BTC) held above the $40,000 level on Thursday amid a broader uptick in global equities as the U.S. Federal Reserve (Fed) hiked rates by 0.25% as expected.
Fed chair Jerome Powell signaled the U.S. economy was “very strong” and could handle monetary tightening, causing a jump in equities. Meanwhile, the Bank of England will also holds its policy meeting on Thursday and is expected to raise interest rates to their pre-Covid levels.
U.S. futures shed 0.51% in European hours while brent crude jumped 4% to near $100. Europe’s Stoxx 600 rose 0.22%, while Asian markets added a second day of gains with Hong Kong’s Hang Sang index rising 7% and Japan’s Nikkei 225 increasing 3.46%.
Bitcoin added nearly 4% over the past 24 hours to trade at $41,640 before traders took profits. Ether (ETH) added 4.7% to weekly highs of $2,790, while Terra’s LUNA lost 0.6% in 24 hours.
Avalanche’s AVAX rose over 11% in the past 24 hours to lead gains among major cryptocurrencies as Terra’s UST stablecoins were deployed on the Avalanche network. Users can now deposit, borrow, and earn yields on UST deposits using Avalanche.
Investors tied ether’s gains to successful testing on the Ethereum network ahead of its move to a proof of stake network.
“Ethereum showed bullish movements on the back of its successful merge on the Kiln testnet, a fundamental milestone in its path toward the transition to proof of stake in the course of the year,” said Fabio Pezzotti, founder of crypto investment firm Iconium, in a Telegram message”We expect the main assets to gain momentum amid positive developments regarding a ceasefire in Ukraine, which would likely revert the bearish trends of the last few months,” he added..
Crypto market capitalization grew by 4% over the past day to $1.82 trillion. The Bitcoin Dominance Index rose 0.2 points to 42.8%. The Fear and Greed index – which calculates market sentiment – added 3 more points in the day to take the “fear” level to 27 suggesting improved sentiment among investors.
Meanwhile, some analysts said strength in bitcoin was buoyed by positive sentiment for the asset among traders.
“Since the last days of February, there has been a solid support line on the declines under $38,000, “explained Alex Kuptsikevich, market analyst at FxPro, in an email to CoinDesk. “And this is bullish strength, reflecting that long-term buyer interest has migrated from $30,000 to $38,000 due to inflation and geopolitical tensions.”
“Such a migration of the level of interest to long-term buyers fully reflects the price jump, which is the actual depreciation of the value of fiat currencies,” added Kuptsikevich.
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