- BTC and ETH surge to two-week high prices, leading to a crypto market recovery.
- Analysts have however warned that new lows may still be expected.
The two market-leading cryptocurrencies, Bitcoin (BTC) and Ether (ETH) have been on a bullish streak during the week. BTC topped $17,000 while ETH crossed $1,250 for the first time in two weeks, with BTC hitting its highest level since Nov 8.
This has also seen the total cryptocurrency market capitalization gain 2 percent in the past seven days to again top $900 billion. According to a CNBC report, the rally was fueled by Federal Reserve Chairman Jerome Powell’s comments confirming that smaller interest rate hikes could start in December. He said:
“The time for moderating the pace of rate increases may come as soon as the December meeting.”
So far in 2022, the Fed has raised interest rates by 0.75 percentage points four times in its fight to rein in the 40-year high inflation the U.S. has been experiencing. The report predicts more price gains in the crypto market if the Fed goes on to implement a 0.5 percentage point rate hike in the last month of the year.
CNBC also notes that the rally is a likely recovery from the hammering investor confidence took in the wake of the FTX collapse. However, with firms still reporting contagion from the collapse, not all analysts are confident of a sustained crypto market price rally.
Analyst warns of a fake out rally
While the market rally appears bullish, not all analysts are convinced of its being sustainable. Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC that the latest rally is likely just as a result of “over-leveraged shorts covering.”
He added that the rally is a bearish retest and that the price of BTC has hit resistance at $17,000 and is likely to go lower from there. The broader crypto market seems to share this view as market sentiment data from the BTC fear and greed index is still flashing extreme bearish sentiments.
Despite the prediction, the crypto market has continued to ride its bullish wave. BTC was trading at around $17,108, up 1.34% in the last 24 hours at the time of writing. Similarly, ETH was up 1.23% in the last 24 hours, trading at $1,283 at the time of writing.
The situation with other crypto tokens among the top 10 cryptocurrencies by market cap. They are largely trading in the green, printing between 0.5% to over 5% gains in the last day. Polygon (MATIC) recorded the biggest gains on the day, clinching a 5.57% price rise at the time of writing.
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