Bitcoin crosses $21k, rises over 11% in 24 hours: Here’s what to expect ahead | Mint – Mint

Bitcoin price: The leader of the cryptocurrency market, Bitcoin made a strong rally on Friday with the coin skyrocketing more than 11% in 24 hours. The rally can be attributed to an easing in the US dollar that has kept other currencies under pressure since the start of this year. Also, investors took a breather from concerns of a further aggressive monetary policy approach from the US Federal Reserve. The US inflation data scheduled next week will give more clarity on the intensity of the Fed's rate hike trend going forward.

Led by broad-based buying sentiment, Bitcoin traded at $21,192.54 up by 10.37% with a market cap of more than $405.75 billion. The coin has touched a 24-hour high of $21,279.27 - climbing by over 11% so far in the day.

Counterpart Ethereum also picked up momentum. It was trading at near $1,710 rising by around 6%. The coin's market cap is around $211.62 billion.

At the interbank forex market, the US dollar currency has plunged by as much as 1% against the pound and euro. The dollar pulled back from its two-decadal peak in the second half of this week.

Dileep Seinberg, Founder & CEO, MuffinPay, Bill Payment & Utility Crypto said, "With this rise, the crypto market extended its gains for the second straight session and the total Market capitalisation raced past the $1 trillion mark once again. This rally can be attributed to the ease of the US dollar which had been hurting the sentiments of the other currencies. The dollar index, after hovering near multi-year highs, took a breather and sparked a rally in other assets including cryptos."

The US is set to announce its August inflation data on Tuesday next week -- which is likely to provide more translucency on the US Federal Reserve's hawkish stance on keeping high-interest rates to fight inflation at cost of economic growth. In July 2022, the US consumer price index slowed better-than-expected at 8.5% -- pulling back from a four-decadal high of 9.1% in June this year.

On Thursday, James Knightley, chief international economist at ING wrote in his note, that Federal Reserve Chair Jerome Powells comments to the Cato institutes conference today on monetary policy are clearly supportive of a third consecutive 75bp interest rate hike on 21 September.

ING economist further wrote, "there is no hint that he supports moderation, arguing that we need to act now, forthrightly, strongly as we have been doing and we have to keep at it until the job is done". There is also the usual mention of inflation expectations and the need to anchor them in order to ensure inflation doesnt become ingrained."

However, the economist believes the rate cut scenario is high in 2023. He said, "With recessionary forces intensifying, we expect inflation to fall relatively swiftly next year thanks to lower gasoline prices feeding through more broadly, weaker wage pressures and declining input costs combined with falling house prices depressing the rental components of CPI. We are currently pencilling in a rate cut in June with further easing through the second half of 2023."

The performance of Bitcoin has been co-related to US stocks amidst the country's inflation data. Especially, since mid-May deep depression due to macroeconomic uncertainties has led to the co-relation between Bitcoin and stocks higher.

"Investors shrugged off Federal Reserve Chairman Jerome Powell's pro-liquidity tightening stance. Cryptocurrencies strengthened from sliding inflation expectations and prospects of renewed monetary easing next year," Seinberg added.

Om Malviya President, Tezos India said, "In my opinion, its just a basic market short-relief and one should refrain from believing that the bull market is over. Had there been any substantial reason behind this, it could have been crystal clear. Such market volatility is akin to Crypto and a much clear image will appear to post the Ethereum Merge."

Subscribe to Mint Newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

Continue reading here:
Bitcoin crosses $21k, rises over 11% in 24 hours: Here's what to expect ahead | Mint - Mint