Bitcoin (BTC), which rose by more than $2,000 on December 15, was a result of markets reacting to the news that the United States Federal Reserve would increase interest rates and reduce its bond buying program, which will begin in 2022.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
“Kindness of what we were thinking”
TradingView and Cointelegraph Markets Pro data showed that BTC/USD hit $49,310 at Bitstamp. This is its highest price since Sunday, when it briefly rose above the $50,000 mark.
After the Fed suggested that it might raise its benchmark rate three more times next year, this momentum was accelerated. This exceeded investor expectations. The central bank also stated that it would accelerate its asset buying taper.
There were concerns that such plans could have a negative effect on traditional and crypto markets due to the “easy” availability liquidity drying up. However, the fact of the matter was that there was uncertainty about the policy.
CNBC quoted Jim Caron as saying that “From an equity perspective they now have to concentrate on earnings margins and growth.”
It’s a relief for the equities market that thought it might be more aggressive. It’s exactly what we had in mind.
The S&P 500 saw modest gains. Altcoins, along with Bitcoin, gained just under 5%. BTC/USD was at $49,000 as of the writing.
BREAKING: The FED maintains its interest rate at 0.025% because it is committed to using all available instruments to support the US economy. This means. #Bitcoin continues to be a bull market
— Michael van de Poppe (@CryptoMichNL) December 15, 2021
Popular analysts were cautious. Cointelegraph contributor Michael van de Poppe stated that the BTC bottom had been reached on December 4. William Clemente decided to wait before advising on market entry at current prices.
“My gut told me to buy BTC. But I am sticking to my plan to become a buyer at $53K confirmation. He told his Twitter followers that he had to follow his plan.
$53,000 would be an exit from December’s most recent range, and also return Bitcoin to a $1 Trillion market cap valuation.
Ethereum surpasses $4,000
Solana (SOL) continued to lead major cap altcoins. It capitalized on past gains and delivered 14% daily growth as of the writing.
Ethereum (ETH), which is the largest altcoin market cap by market capital, reclaimed the $4,000 mark during its Fed-induced rally.
BITSTAMP: ETH/BTC 1-hour candle charts Source: TradingView
After hitting local lows at 0.078 earlier in day, ETH rebounded against Bitcoin and surpassed the 0.08 BTC mark.