The crypto market has experienced a slight bounce with Bitcoin leading the way. The top cryptocurrency jumped to over $27,000 in the last 24 hours, gaining 2.42%. Other top cryptocurrencies have also bounced slightly as a result.
This represents a break out of a tight trading range that had held the market since mid-August. Bitcoin’s surge to $27,000 is a significant move for investors, as the market has been characterized by low volatility for weeks.
Other top cryptocurrencies like Ethereum and Binance Coin (BNB) have also gained noticeably. However, there are other assets that are not well known, such as Toncoin that has gained over 5% in the last 24 hours, making it the highest gainer among the top ten cryptocurrencies. The token also recently joined the top ten following months of upward movement.
Solana has also gained over 4% in the last 24 hours, making it even a higher gainer that Bitcoin, Ethereum, and BNB. In general, the market is in a relief rally that may or may not last, depending on the outcome of the Fed decision this week.
Investors Await Fed Decision
The Federal Reserve is set to announce its decision on interest rates this week. This could have alerted investors to prepare for an outcome which could affect the market in the coming months. It is expected that the Fed will maintain steady interest rates in its forthcoming announcement on Wednesday.
This is expected to affect the crypto market in ways similar to how it affects Dow Jones and the S&P 500. An increase in interest rates could spell doom for the crypto market as investors are not likely to go for risk assets like Bitcoin when interest rates on less risky forms of money are high.
On the contrary, a reduction of interest rates could have a positive impact on the cryptocurrency market since investors will be more likely to risk investing in cryptocurrencies in exchange for higher returns on their investments.
The current rally could be a reflection of investors’ activity around the market in hopes of a favorable announcement from the Fed which could trigger a bigger rally. However if the announcement comes out negative, the market may quickly lose its steam and return to the previous tight range it was trading in before now.
Crypto market Hopeful
Regardless of the Fed’s announcement outcome on Wednesday, analysts see good days ahead for the crypto industry, led by Bitcoin. Many analysts have predicted that Bitcoin can rise to higher prices in the coming months due to some factors such as the coming halving in 2024.
Another reason for optimism around Bitcoin and crypto is the potential for a Bitcoin spot ETF approval in the U.S. Many applications have been filed for a Bitcoin spot ETF in the U.S over the years, but none has been approved so far.
However with the current trends, there is a much higher likelihood of one of this year’s applications getting a nod from the securities and exchange commission. With all these factors combined, one analyst, PlanB sees Bitcoin reaching as high as $100,000 to $1 million by 2025. If this happens, of course the larger crypto market is likely to follow suit, leading to a rewarding season for investors.