Despite the FUD surrounding the U.S. Fed rate hike and recession, the crypto market continues to climb higher. Top cryptocurrencies Bitcoin (BTC) and Ethereum (ETH) prices have skyrocketed by 28% and 72% in July due to positive sentiments of bottom and bear market-end, whale activity, waning Fed rate hikes, and the Ethereum merge.
The upward momentum can be seen in the broader crypto market, as well as the stock market. Undoubtedly, the crypto market’s correlation with the U.S. stock market can’t be questioned. The stock prices have also rebounded significantly after the Fed inflation data on July 13.
Factors Influencing Crypto Market Rally
The U.S. Federal Reserve raised interest rate by 75 bps on Wednesday, turning down the 100 bps hike. Moreover, U.S. gross domestic product (GDP) report on Thursday confirmed a recession as the U.S. had a second consecutive quarter of negative GDP growth.
However, the stock market and crypto market continue to rise higher. Bitcoin (BTC) price soars 5% to $24,294 in the last 24 hours and Ethereum (ETH) 8% to $1,774, both reaching nearly 2-month high.
The prices are rising as investing is always about the future perspective. Economists and investors believe the market will recover as Fed Chair Jerome Powell confirms slow rate hikes, but economic recovery will also be slow. Meanwhile, Treasury secretary Janet Yellen downplayed recession data, citing the strength of the labor market and falling energy prices.
Moreover, the bear market seems to end soon after nearly 8 months, with the last 2-months of massive price depreciation across the crypto market. Crypto enthusiasts such as Binance CEO “CZ”, MicroStrategy’s Michael Saylor, and Galaxy Investment’s Michael Novogratz were bullish on the crypto market ahead of the FOMC meeting.
Furthermore, the Bitcoin price breaking above the key $22.8k level, the 200-weekly moving average, was indicative of bullishness in the market. A rise in whale accumulations and exchange outflows were recorded. Other than BTC and ETH, whales are buying top altcoins including MATIC, SHIB, DOGE, ADA, XRP, etc.
Ethereum Merge is also an important factor for the rally in altcoins. According to Mark Newton, head of technical strategy at Fundstrat, Ethereum (ETH) is oversold below $2000 and pullbacks in mid-August will drive more buying.
Rising Development Activity in Altcoins
The bullishness in the crypto market is also supported by rising developments across the market. Vitalik Buterin announced developments regarding the Ethereum Merge transitioning to PoS.
Altcoins such as Cardano, Shiba Inu, Polygon, and others are also witnessing strong developer activity. Cardano’s Vasil hard fork remains the most followed by the community. Shiba Inu’s Shibarium Layer-2 solution will provide faster and more scalable transactions.
Polygon has been partnering with major institutions for blockchain solutions and support. Also, unveiled the Polygon zkEVM Layer-2 solution.
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