After a brief slip, Bitcoin pulled back to the crucial $17,000 level allowing buyers to recuperate. The popular cryptocurrency is trading at $17,055 a smidgen of a percentage point over the last 24 hours.
Bitcoin managed to remain tethered to the $17,000 handhold it grabbed a week ago when the Federal Reserve suggested that it was retreating from its ultra-monetary hawkishness. But then Jerome Powell, the Fed Chair, said on December 1 that the central bank might raise interest rates higher than expected in 2023 despite it looking at lowering its next rate hike from the current 75 basis point increases to 50.
The crypto market reacted positively. This showed that macro conditions still play a substantial part in Bitcoin’s price discovery onwards. Arcane Research highlighted that markets have stayed directionless as BTC spent the first six days of December in a narrow trading range near $17,000. It said the market slowdown is reflected in reduced trading volumes in spot and derivatives markets. Moreover, the current month of December seems to have caused market participants to stay away from the crypto market.
Data also shows that crypto prices veered from U.S equity indexes which sank because of inflationary concerns and macroeconomic uncertainties. And Nasdaq dived 2%, while S&P 500 with its strong technology component fell 1.4%. Arcane stated that the crypto market’s more than week-long calm stemmed from a trader exodus following the collapse of Sam Bankman-Fried’s FTX crypto exchange.
Mark Conners, head of research at 3iQ, outlined that institutions have been doubling down on the promise of blockchain and digital assets despite the FTX filing for bankruptcy protection and other contagions. The firm noted that Fidelity’s new retail-focused digital asset offering and recent comments by the industry’s major players called for an embrace of digital asset innovation.