The cryptocurrency market, led by Bitcoin (BTC) and Ether (ETH), has been recording a price surge following a remark made by Federal Reserve chair Jerome Powell that the central bank is likely to slow down its interest rate hikes.
Per analysis from Santiment, the rare encouraging 2022 announcement saw BTC cross $17,000 and ETH cross $1,300 for the first time since the middle of November.
Santiment added that with interest rate hikes potentially slowing down, the crypto market may see strong bullish support in the days before the Federal Open Market Committee (FOMC) meeting.
“Jerome Powell made a rare encouraging 2022 announcement for markets today. With interest rate hikes potentially slowing, crypto & equities immediately responded by surging. We may see strong bullish support leading up to the Dec 13-14 FOMC meetings,” Santiment said in the tweet.
The Fed was expected to announce its last rate hike for 2022—an anticipated 0.5 percentage points hike as opposed to the four previous 0.75 percentage point hikes so far in the year—during the meeting.
Santiment had previously noted that Bitcoin whales have been showing “moderate signs of accumulation” in the past few days even as the market was trying to recover from the FTX exchange collapse contagion. The whales accumulated 43,888 BTC in five days, reversing a 13-months streak of cumulative dumping.
Bearish sentiments continue to linger for the crypto market
Despite the price spike that was kick-started by Powell’s encouraging remark, some analysts maintain that the crypto market is still underlyingly bearish. Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC that the latest rally is likely just a bearish retest.
He opined that the rally is a fake out as the price of BTC has currently hit resistance at $17,000 and is likely to go lower from there as the price run is a result of over-leveraged short traders covering their positions.
Despite the wavering investor confidence, BTC has continued its upsurge. The flagship crypto is trading at $16,644 down 2.13% in the last 24 hours at the time of writing. Other tokens among the top 10 largest cryptocurrencies by market cap have also all been trading in the green. Meanwhile, Powell’s announcement also saw the stock market record an upswing.