Business Standard

Crypto wrap: Market in the green ahead of US Fed announcement next month

The US Federal Reserve is expected to meet on May 2 and 3 to decide on further rate hikes

crypto, crypto currency, bitcoin

Photo: Pexels

Raghav Aggarwal New Delhi

Listen to This Article

The cryptocurrency market was trading in the green on Friday, ahead of the meeting of the US Federal Reserve (Fed) scheduled to be held on May 2 and 3. In the last seven days, Bitcoin, the largest crypto token by market cap, rose over 4 per cent and was trading at $29,330, according to CoinMarketCap. The total market cap was $1.2 trillion.

Bitcoin touched $30,000 briefly on Wednesday but fell on Thursday.

"At the start of the week, Bitcoin experienced a decline and entered a correction phase, trading below the $28,000 level. However, on Wednesday, the cryptocurrency saw an uptick above $28,000, which is believed to be linked to concerns over banking stability following the announcement of a $100 billion deposit loss by First Republic Bank during its Q1 earnings presentation," said Alankar Saxena, chief technology officer (CTO) and co-founder of crypto platform Mudrex.

A recent report by Reuters suggested that US officials have held urgent discussions to rescue crisis-stricken First Republic Bank. It is still unclear if the US government will rescue the lender, but the negotiations have emboldened the bank's executives.

According to the research team of crypto exchange CoinDCX, the fall on Thursday was due to "speculation that more Bitcoin was being moved to exchanges, which is often a sign of selling. The day was marked by high volatility, with over $350 million in liquidations taking place as Bitcoin experienced ups and downs of up to 9 per cent within 24 hours." 

Patel added that support for Bitcoin is anticipated at $29,250 and resistance at $29,800.

Ethereum, the second biggest token, was flat during the last week. It touched $2,000 earlier this month but has fallen below it since its Shapella update on April 12.

"The next FOMC meeting which is scheduled for the first week of May will be closely watched by the crypto community. Any decision on a rate hike may have an immediate impact on the crypto market," said Shivam Thakral, CEO of crypto exchange BuyUcoin.

Experts also said that more traditional financial firms are adding blockchain technology to their offerings.

"Franklin Templeton, which manages $1.4 trillion in assets, announced on Wednesday that its OnChain US Government Money Fund is now supported on the Polygon network, giving investors access to the Ethereum blockchain. The company stated that integrating blockchain technology into its system would result in operational efficiencies such as increased security, faster transaction processing, and reduced costs," CoinDCX said.

"Google Cloud has partnered with Polygon Labs to simplify the process of building, launching, and scaling Web3 products and decentralized applications (dapps) on the Ethereum-based layer 2 blockchain," said Parth Chaturvedi, crypto ecosystem lead at crypto exchange CoinSwitch.

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Apr 28 2023 | 4:42 PM IST

Explore News