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The cryptocurrency market, led by Bitcoin (BTC) and Ether (ETH), has been seeing a price surge following a comment made by Federal Reserve Chairman Jerome Powell that the central bank is likely to reduce the speed of your interest rate increases.
For santiment's analysisthe rare and encouraging 2022 announcement saw BTC cross $17,000 and ETH cross $1,300 for the first time since mid-November.
Santiment added that with the potential slowdown in interest rate hikes, the crypto market may see strong bullish support in the days leading up to the Federal Open Market Committee (FOMC) meeting.
โJerome Powell made a rare and encouraging 2022 announcement for the markets today. With interest rate hikes potentially slowing, cryptocurrencies and stocks immediately responded by rising. We may see strong bullish support ahead of the December 13-14 FOMC meetings,โ Santiment said in the tweet.
The Fed was expected to announce its last rate hike for 2022, an anticipated increase of 0.5 percentage point compared to the previous four 0.75 percentage point increases so far this year, during the meeting.
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Santiment had previously noted that Bitcoin whales have been showing โmoderate signs of accumulationโ in recent days, even as the market was trying to recover from contagion from the FTX exchange crash. The whales amassed 43,888 BTC in five days, reversing a 13-month streak of cumulative dumping.
Bearish sentiments continue to linger for the crypto market
Despite the price rise that Powell's encouraging comment started, some analysts argue that the underlying cryptocurrency market remains bearish. Vijay Ayyar, vice president of corporate and international development at crypto exchange Luno, told CNBC that the latest rally is probably just a bearish retest.
He opined that the rally is bogus as BTC price has currently touched resistance at $17,000 and is likely to turn lower from there as the price rally is a result of over-leveraged short traders covering their positions.
Despite wavering investor confidence, BTC has continued its boom. The flagship crypto is trading at $16,644 down 2.13% over the past 24 hours as of this writing. Other tokens among the top 10 cryptocurrencies by market capitalization have also been trading in the green. Meanwhile, Powell's announcement also caused the stock market to rally.
