Bitcoin broke through a key resistance level as markets mulled the first US Federal Reserve interest rate hike since 2018, fuelling speculation digital tokens may be set for a sustained rally.
Bitcoin rose 3.71% to US$40,873, its highest price in a week. Ethereum gained 4.46% to US$2,757, its highest in more than seven days.
The stock and crypto markets have become increasingly aligned over the last year as more and more equity investors look for opportunities in the world of digital currency.
So, it perhaps no surprise the cryptos recovery coincided with a rebound in wider global markets yesterday following the Fed interest rate hike.
“The kneejerk reaction to the (Fed) decision was an early selloff then a strong rebound. The question is, could it last?” said Ipek Ozkardeskaya, a senior analyst at Swissquote.
The tech-heavy Nasdaq index saw an initial sell-off following the announcement, falling to 13,002 points before rallying and closing at 13,440.
Over in Asian, the Hang-Seng index, which also features large tech stocks, gained nearly 1,500 points as the markets in the East woke to news of the interest rate hike.
Ozkardeskaya added, however, that a “gentle Fed was the biggest driver of the post-pandemic market rally, and we will see how a less supportive Fed will impact the company valuations.”
This suggest the jury is still out on whether the recent rebound in stock and crypto markets has staying power.
In some of the altcoins, Solana was up 5.44% to US$87.06, XRP was up 3.14% to US$0.7883 and Cardano was up 5.08% to US$0.842.