Wednesday saw Bitcoin stock and other cryptocurrencies extend their gains from the previous day, increasing despite the instability dragging on the cryptocurrency market. The surge could continue, even though the next move in digital assets will likely follow the stock market movement.
Bitcoin Stock Price
The price of Bitcoin has increased by 2% to reach around $17,800 over 24 hours. This represents the most excellent levels since the crypto exchange FTX’s shocking bankruptcy last month, which drove prices down to approximately $15,500 from above $20,000, reaching two-year lows.
An analyst at the brokerage firm Oanda named Edward Moya stated that “to the shock of many crypto watchers, Bitcoin continues to retain the region near $17,000.” Bitcoin is moving near to $18,000, and this rally could continue if risk appetite stays strong after the Fed has finished its meeting.
Traders in cryptocurrencies and stock markets are waiting for the latest monetary policy decision from the Federal Reserve. It is widely anticipated that the Fed will slow down the aggressive pace of interest rate increases it has been implementing with a hike of 50 basis points on Wednesday. The Federal Reserve has taken significant action this year to tighten financial conditions to bring inflation under control. Since June, investors had been looking for some reprieve after a string of four straight rate hikes of 75 basis points.
In 2022, digital assets and equities have become more connected amid a challenging macro backdrop marked by high inflation and rising interest rates. Both of these factors have placed a significant amount of pressure on risk-sensitive assets. It has also proven a double-edged sword, making tokens vulnerable to selloffs whenever stock prices fall.
The most recent leg up for cryptocurrencies and equities alike occurred after inflation data for the United States consumer price index came in lower than expected on Tuesday. This fueled speculations that the Federal Reserve will be able to loosen policy further into next year. Following the decision that the central bank made on Wednesday, all eyes will be on Fed Chairman Jerome Powell’s press conference to see what kind of hints he provides for the possible direction that monetary policy may go into 2023.
Both traditional stocks and cryptocurrencies are susceptible to losses if investors discover that Powell will not be as dovish as they had hoped. Bitcoin can follow the Dow Jones Industrial Average and S&P 500 upward to post another significant gain from its FTX bottom if the head of the central bank appears receptive. This might lead to the opposite of what has happened so far, which would be a significant gain.
Others were even more optimistic about the market.
An analyst working for the brokerage firm AvaTrade named Naeem Aslam stated, “there is no doubt that Bitcoin prices are oversold regardless of whatsoever parameter you look at when it comes to technical price analysis.” “There are greater prospects for the price to continue to increase, and we may see the price moving past $20,000 before the end of the year if the current trend continues.” [T]here is a significant probability that the price will continue to increase.
The recent surge in cryptocurrency prices, spurred by positive stock market activity, is occurring at an unusual time. Sam Bankman-Fried, the former CEO of FTX, was taken into custody this week on various allegations related to financial crimes. This comes when the legal and regulatory landscape is becoming increasingly hostile to cryptocurrencies. This week, Binance, the largest cryptocurrency exchange in the world, has also been the subject of concerns around reported legal threats.
There are dangers to the very existence of crypto. Traders don’t appear to care about this for the time being, as they are willing to continue betting on Bitcoin using the same macro lens as they would bid up stock prices.
Beyond Bitcoin stock, the second-largest cryptocurrency, Ether, climbed 3% to a price above $1,300. Cardano and Polygon were among the smaller tokens or alternative cryptocurrencies that saw comparable gains in price. The performance of memecoins was virtually unchanged, with Dogecoin and Shiba Inu achieving a 2% increase.
Featured Image – Pexels © Karolina Grabowska
Author Valerie Remorosa 
