Bitcoin (BTC) and ether (ETH) have experienced little movement in the past 24 hours, with both cryptocurrencies lacking significant catalysts and facing fading volumes in spot and futures markets.
The price of bitcoin seemed poised to surpass the $27,000 level early on Wednesday. However, the rally was halted as the U.S. stock market experienced another decline. This setback is due to the dollar gaining momentum, putting pressure on equity markets.
According to FxPro markets analyst Alex Kuptsikevich, while cryptocurrencies are witnessing increased buying, the equity markets are under the most pressure. Unfortunately, this momentary surge in momentum did not last long, dampening expectations for a bullish trend.
Kuptsikevich added that for the crypto sector to generate sustainable growth momentum, it may require banking problems or uncertainty regarding government solvency. He believes that recent developments in bond markets indicate that such situations may be brewing, stating that bitcoin and other cryptocurrencies “need financial chaos for growth.”
In contrast to the relatively stable movement of bitcoin and ether, alternative tokens have demonstrated volatility in the crypto market. Bitcoin Cash (BCH) surged by 8%, while Maker’s MKR tokens, a DeFi protocol, rose by 7%. The increase in MKR tokens could be attributed to a rise in wallet balances holding the token on exchanges, indicating a demand for it.
The recent comments from the U.S. Federal Reserve suggest that interest rates might remain high for an extended period. This has affected broader markets in the U.S. as traders factor in inflation fears.
Overall, the crypto market currently lacks significant catalysts, with bitcoin and ether experiencing limited movement. The potential for sustained growth momentum in the crypto sector might require external factors like financial turmoil or government uncertainty, according to analysts. In the meantime, alternative tokens have displayed more volatility, providing some opportunities for traders.