First Mover Americas: Bitcoin Up 3percent After Wild Ride on Fed Rate Day
Categories: Crypto News
First Mover Americas: Bitcoin Up 3% After Wild Ride on 'Fed Rate Day'
- Prices Point: Bitcoin is up 3.3% on the day, roughly back to the level it was early Wednesday before the Fed announced it will raise its benchmark rate by 0.75 percentage point.
- Market Move: The XRP token has rallied sharply this month on the anticipation of a resolution of an SEC lawsuit against Ripple, XRP's issuer.
- Chart of the Day: The U.S. Treasury yield curve is now at its most inverted point in four decades.
Price Point
- Bitcoin (BTC) was up 3.3% Thursday at around $19,100 – roughly back to where it was early Wednesday before a wild 24 hours of price swings that spanned the Federal Reserve’s latest announcement that it will continue its campaign of aggressive interest rate hikes.
- The Fed’s rate moves have been pushing up the dollar’s value in foreign-exchange markets, and now cracks are starting to appear: Japan announced its first currency intervention in more than two decades to shore up the yen. Meanwhile, Switzerland, Norway and the U.K. all raised borrowing costs in the wake of the Fed’s decision.
- Ether (ETH), the second-largest cryptocurrency, was gaining along with bitcoin, up 4.5% on the day to about $1,300. The broad CoinDesk Market Index was higher, led by Algorand’s ALGO with a 12% gain over the past 24 hours.
Market Moves
- Payments-focused cryptocurrency XRP has rallied sharply this month, outshining larger cryptocurrencies. Some traders are snapping up bullish bets in the options market in hopes of continued gains into the year end.The cryptocurrency, ranked fifth by market value, traded at 42.6 cents at press time, a 28% gain for the month, according to CoinDesk data. Market leaders bitcoin and ether were down 4.5% and 17%, respectively.
- "We have seen interest in buying XRP year-end upside call options in anticipation of a resolution in the ongoing lawsuit with the U.S. Securities and Exchange Commission," Dick Lo, founder and CEO of Hong Kong-based quant trading firm and liquidity provider TDX Strategies, said.
- A call is a derivative contract giving the purchaser the right but not the obligation to buy the underlying asset – in this case, XRP – at a predetermined price on or before specific expiry date. A call, therefore, is preferred by bullish speculation, while a put option represents a bearish bet.
Chart of the Day
- "The yield curve screams economic slowdown but also validates Powell's hawkish credentials," Ilan Solot, a partner at Tagus Capital, wrote in the daily market update, referring to Fed Chairman Jerome Powell.
- The relentless curve inversion could only add to the dollar's ongoing bullish momentum and make matters difficult for risk assets, including cryptocurrencies.
- The 90-day correlation coefficient between the dollar index and the yield curve was -0.8 at press time, indicating a strong inverse relationship between the two.