Amidst the frozen cryptocurrency market, Bitcoin bagged its biggest gain in a week. The global cryptocurrency market cap increased 4.78% to $961 billion over the day while Bitcoin traded over $21,000, according to CoinMarketCap, at the time of writing (1.18 pm, India time).
According to experts, the overall market seemed to be on a bullish sentiment. “Bitcoin’s market capitalisation was up more than 13% for this week. This is aligned with the traditional markets as investors reacted to the updated guidance from the FED officials claiming recessionary concerns are overblown,” Anndy Lian, chief digital advisor, Mongolian Productivity, a government organisation, told FE Digital Currency.
Even as cryptocurrency markets are responding in an optimistic way to the reassurance given by the US Federal Reserve which largely stressed on the fact that concerns around recession are blown out of proportion, bitcoin is still down by around 70% from its all time high and 50% lower in 2022. As per industry observers, these short term bullish cases are not sustainable. Lian added that the threat of more deleveraging is still a key concern for crypto. The global economic uncertainties and risks remain high. “A wait and see mindset would be more suitable at this point of time,” he noted.
Meanwhile, Ether, the second largest cryptocurrency, jumped more than five percent to $1,241.26. Bitcoin, Ethereum, and others cryptocurrencies noted a sudden spike in the US equity markets.
Moreover, as per reports, a brief rise in crypto price was witnessed in the last 24 hours and sentiment has temporarily improved. “Celsius has reclaimed $450 million of collateral in wBTC (wrapped bitcoin), closing its loan from decentralised finance (DeFi) lending protocol maker. We shall witness liquidations in upcoming days and price correction will happen again, ” Gaurav Mehta, founder, Catax- Simple Crypto Taxes, an online crypto tax solution, said.
However, industry observers pointed out that the industry needs to tread cautiously. “While the market hasn’t hit rock bottom yet, it is expected that prices may drop even further over the coming weeks or months,” Raj A Kapoor, founder, India Blockchain Alliance, a think-tank, added.
Bitcoin has remained more than 50% below in 2022, hit by the monetary tightening and hint of struggle in the digital-asset sector. Other cryptos such as Solana, Stellar, Chainlink, BNB, Tron, Litecoin, Uniswap, Tether, XRP prices’ also improved.