Digital currency Bitcoin hovered above $24,000 on Friday, reaching a 6-week high, with US stocks continuing to rally strongly, and today’s rally came on the back of better-than-expected earnings from Amazon (NASDAQ:AMZN).
The digital currency recorded a level of 24,412 dollars today, and then fell somewhat towards 24 thousand dollars.
The crypto rally follows the Fed’s decision this week to raise interest rates by 75 basis points.
The Fed triggered its decision, and Powell’s tone that the peak of tightening had already lapsed into lower real interest rates (the interest rate minus inflation).
Expectations now indicate that the rate reduction will start in 2023, and the amounts of raising are limited and less than previously in the next three meetings.
Risk appetite is reviving with low interest rates, which indicate that people will not have to pay much to borrow.
“I think the markets have responded positively to the Fed’s comments, and have already priced in the interest rates that will be announced towards the end of the year,” says crypto market analyst Vijay Iyar, vice president of Luno, a cryptocurrency trading platform.
“It seems that there is a lot of liquidity standing outside the market watching the events, and now the pressure that pushed the digital currencies to strengthen or decline during the last period has eased.”
Bitcoin is still 60% off the record high set last November at $68,990.
This year, in addition to the Federal Reserve, the market witnessed the collapse of the stable currency Terra Luna, Luna, and the bankruptcy of several companies such as Celsius and the 3 Arrows Fund.
Experts believe that the worst is over for cryptocurrencies, and the focus has now shifted to reading the macroeconomic environment, and before announcing the end of the crypto bear market, experts say that the macroeconomic landscape must improve.
So far, the US GDP reading has indicated that the economy has entered a recession after achieving two consecutive quarters of negative output, and the European economy today recorded a new record inflation rate due to the continuation of the Russian-Ukrainian war, which casts its pretexts on the global economy.
The International Monetary Fund’s forecasts indicated a decline in the economies of all developed, emerging and developing countries.