ยฉ Reuters.
Cryptocurrencies led by have seen a surge today, breaking the stagnant trading range that prevailed since mid-August. Bitcoin, the largest digital asset, saw its price increase by 1%, surpassing $26,750 and distancing itself from the $26,000 benchmark around which it has been trading for the last month. A move beyond $27,000 is considered an important milestone for traders, given the recent low volatility and trading volumes in the crypto market.
In anticipation of the Federal Reserve's decision this week, investors are preparing to closely analyze the Fed's language for any hint of a possible rate hike in November. This decision is expected to affect cryptocurrency prices, mirroring its effect on the stock market. The central bank is expected to keep interest rates steady in its next announcement on Wednesday.
Over the past year, borrowing costs hit their highest level in a generation as the Federal Reserve moved to control inflation. This has put considerable pressure on both cryptocurrencies and stocks because higher returns on risk-free cash often reduce demand for riskier investments like Bitcoin. If there are signs that the central bank could pause rate hikes and possibly reduce them next year, this could boost Bitcoin's recent gains if traders decide to invest more in riskier assets.
Ether, the second largest cryptocurrency, also saw an increase, although less than 1%, to reach $1,630. The performance of smaller tokens or altcoins was less dynamic and Polygon traded slightly above the flat level. Memecoins presented a mixed picture, falling close to 1% and losing less than 1%.
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