The crypto market surged higher on Thursday, bouncing back after the ferocious sell-off earlier this week. Cryptocurrencies swung from negative into positive territory even after U.S. Federal Reserve Chair Jerome Powell announced a 75 basis-point increase on its benchmark interest rate, the biggest since 1994.
Cryptocurrencies Chart Stunning Relief Rally
The crypto market has stabilized — at least for now.
The majority of cryptocurrencies advanced sharply today following yesterday’s Federal Open Market Committee (FOMC) meeting. The U.S. central bank revealed it would be making the most aggressive rate hike in 28 years as part of an ongoing effort to tamp down fast-rising inflation.
While rate hikes are normally bad for risk-on assets like crypto, the latest news appears to have been welcomed by market participants, with the Fed’s commitment to a far more aggressive approach lighting a fire under the bulls. Total crypto market capitalization swelled by some 1.8% after slumping below $1 trillion earlier this week and touching levels seen in early 2021.
Bitcoin, the world’s most valuable cryptocurrency, is up by 2.01% over the past 24 hours and is currently changing hands at $21,367.93, according to CoinMarketCap data.
Other cryptocurrencies are notably faring much better. The second-largest cryptocurrency by market cap, Ethereum, surged 5.12% on the day and is currently hovering around $1,136.10. Solana (SOL) and Cardano (ADA) are noticeably the winners among the top 10 cryptocurrencies with 8.14% and 7.45% gains respectively.
Dogecoin added 5.85%, while Polkadot’s DOT and Tron’s TRX rose some 4.20% and 7.28% respectively. TRX’s upsurge was also boosted by news of TronDAO injecting an additional $220 million to defend the stability of the USDD stablecoin.
Is The Worst Finally Over?
The mini crypto rally, however, has not been enough to counter the losses from the recent market meltdown. BTC remains down 30.5% on a weekly basis and ETH is down 38.2% over the same timeframe. In other words, this minor rally could be a bull trap for investors that misinterpret the slight upsurge as a sign of hitting the bottom.
According to the CEO of private equity fund Patriarch Organization, Eric Schiffer, today was merely a “short-term crypto bear market rally”. “This bear market won’t go away until the Fed decides that it’s going to soften, which I expect at the end of the third quarter,” he summarized.