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On November 28, surged by 617 points, recording its biggest rally since March. Following the unexpected rebound of the , the crypto market increased in valuation, by more than $23 billion.
Federal Reserve Chairman Jerome Powell announced on Wednesday that interest rates have declined to a neutral level, reflecting the performance of the market and the U.S. economy over the past several months.
Powell :
“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy — that is, neither speeding up nor slowing down growth.”
Investors Happy
U.S. President has been vocal about his opposition against rising Federal Reserve interest rates and has attributed the recent sell-off of the market to the fed rate hike.
According to SlateStone Wealth executive Rober Pavlik, the pullback of the Federal reserve interest rate is what the investors in the U.S. market were waiting for, and as soon as chairman Jerome Powell’s statement was released, the U.S. stock market bounced by a large margin.
“[Pwell’s comments are] exactly what the market was expecting to hear. Obviously it has to do with the market reaction to his previous comments. He had to walk that back,” Pavlik said.
Throughout the past two weeks, reflecting the performance of the U.S. stock market, the cryptocurrency market suffered a steep decline, losing more than $90 billion of its valuation at one point.
Some analysts attributed the decline in the valuation of the crypto market to the in-fighting between bitcoin Cash and bitcoin Cash SV, while some argued that the and bitcoin futures market largely impacted the price trend of
A small portion of investors in the crypto market theorized that the abrupt decline in the confidence towards U.S. stock markets also led investors to liquidate high-risk assets like cryptocurrenies, as investors feared a stock market crash and headed to the exits.
As the U.S. stock market recovered, the cryptocurrency market recovered by more than $23 billion, with bitcoin recording its largest single-day price surge since April, when the price of bitcoin increased from the $6,000 region to $8,000 within a matter of minutes.
Where is the Cryptocurrency Market Going
With extreme volatility in the range between $3,000 to $5,000, technical analysts in the cryptocurrency market generally believe that a pullback to the low region of $3,000 still remains a possibility.
The recovery of bitcoin from $3,300 to $4,300 in the past two days demonstrated decent momentum, but it was not strong enough to conclusively decare that the bottom of bitcoin is established.
While there exists no direct correlation between crypto and the U.S. stock market, a prosperous U.S. economy throughout the months to come could lead to more investors entering the cryptocurrency market, especially considering the January launch of the futures market by ICE and the New York Stock Exchange.
Featured image from Shutterstock.
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Published at Thu, 29 Nov 2018 21:29:30 +0000
