Cryptos recover from weekend selloff, but sideways action may persist until mid-March Fed meeting
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Cryptos have bounced back from the weekend selloff — but overall seem to be treading water, with one Aussie analyst saying he expects risk assets to remain suppressed until next month’s Federal Reserve meeting.
Bitcoin was trading at a four-day high of US$44,154 at lunchtime (Sydney time), up 3.5 per cent from yesterday, while Ethereum was up 7.4 per cent to $3,153, also its highest level since Friday.
Overall the crypto market was up 5.0 per cent to US$2.08 trillion, with all of the top 50 coins (except stablecoins) in the green.
Avalanche was the biggest gainer in the top 10, rising 12.5 per cent to US$93.35.
In the top 100, Decentraland was up 15.9 per cent to $3.34, followed by Secret Network, up 13.6 per cent.
But the gains only put BTC and Ethereum back where they were a week ago. XRP, Cardano and Solana are actually down for the week, with Avax the only significant gainer in the top 10.
Sydney-based City Index analyst Tony Sycamore told Stockhead that the market is waiting to see what will happen at the March 15-16 Federal Reserve meeting.
“It’s going to be important to see if they go 25 or 50bp (interest rate hike) next month,” he said in a message.
“If they only go 25bp would expect to see a relief rally, but (I) think more likely they get the ball rolling with a quick 50bp.”
“That’s going to keep risk assets suppressed I think.”
A Reuters poll of 84 economists queried February 7 to 15 found that all of them expected the Fed to raise rates by at least 25 basis points, while 20 of them forecast a 50 to 75 point hike.
The market is also watching what’s playing out in Ukraine, Sycamore added. US President Joe Biden said today that a Russian invasion was still “distinctly possible,” but a diplomatic solution remained possible.