Bitcoin surged to around $20,900 on October 26 and is currently trading around $20,500. Will we see a recovery?
Data from CoinMarketCap showed that the cryptocurrency market turned green last week, ending a series of sideways trading that lasted nearly 3 weeks.
Ethereum (ETH), the second-largest coin, made a stronger rally. The coin skyrocketed nearly 5% in 24 hours and over 21% in 7 days, rising from $1,350 to $1,583 – ETH’s highest price since Sept. 15, the Merge date. ETH’s inflation rate has decreased sharply post-Merge.
This strengthens people’s belief in the upward momentum of the coin in the future.
Other coins are also increasing. Top 20 altcoins have reportedly gained 5% to 18% in the last 24 hours. The most impressive performance went to Dogecoin (DOGE) with a 18% increase.
The Bank is Spending
There is no substantial news to support the cryptocurrency market’s robust recovery. However, the reason for Dogecoin’s incredible performance could be linked to Elon Musk’s recent contract with Twitter.
After a series of negotiations between the two parties, the billionaire successfully became the new chief of the social network in a $44 billion deal.
According to The New York Times, Elon Musk initiated his clean-up campaign soon after the new ownership took over. Twitter’s new CEO sacked four senior executives: CEO Parag Agrawal, CFO Ned Segal, Chief Legal and Policy Officer Vijaya Gadde, and General Counsel Sean Edgett.
Despite a prolonged stretch of gloomy days in the cryptocurrency market, Bitcoin (BTC) is becoming a more stable asset than US stocks.
However, it is crucial to realize that the Bitcoin retracement phenomenon is not new. The crypto market and traditional finance are both facing new challenges as they prepare for a slew of macroeconomic data from the United States.
Key Macro Events Are Underway
The Personal Consumption Expenditures (PCE) index rose 5.1% in September, compared with an estimate of 5.2%. This trend, like the CPI, is a downward trend and has verified that inflation spreads across sectors, not just one commodity.
Many technology behemoths, including Microsoft, Alphabet (Google), Meta (Facebook), Apple, and Amazon, released their third-quarter earnings reports this week. Google shares plummeted substantially on October 26 after the company announced poor business performance in the fall.
The focus will obviously be on the Fed’s announcement of rate hikes on November 3, with economists predicting another 0.75% increase. The Federal Reserve boosted interest rates from 0.25% to 3% in 2022, the highest level since the 2008 financial crisis.
The U.S. central bank won’t pause its rally until inflation falls to about half its current level. The strongest tightening cycle in decades has brought greater recession risks than ever before. The Fed will have another rate adjustment in December.
Recently, it was reported that Federal Reserve officials agreed to raise interest rates by 0.75% in November, but would consider a lower hike in December after seeing the negative impact of rate adjustments on the economy.
On November 11, the United States will report October inflation figures. The revelation will undoubtedly cause Bitcoin and the cryptocurrency market to fluctuate.
Investors are examining the risks as the Fed considers tightening the market in reaction to inflation, implying that the likelihood of pumping money into the market is lower this year. The market is struggling to attract new investors as the situation worsens.
On the other side, the industry is increasingly being scrutinized by regulators. Seems a little late.
The Securities and Exchange Commission (SEC) has specifically increased its efforts in response to recent occurrences in the cryptocurrency market and bankruptcy filed by some of the top bitcoin lenders.
The SEC is also looking into cryptocurrency exchanges for allegedly listing security tokens. We shall see.
The post Bitcoin Approaches $21k Amid Macro News: Where Next? appeared first on Blockonomi.