Cryptos Rally Despite Hints Of Recession In Fed Minutes

Cryptocurrencies have gained close to 2 percent in the past 24 hours amidst mixed inflation data and hints of a mild recession in the minutes of the previous FOMC held on March 21-22. Though inflation moved much on expected lines, minutes of the previous FOMC revealed the staff’s projection of a mild recession starting later this year, with a recovery over the subsequent two years.

Deliberations at the FOMC also revealed a dilemma between a rate hike and pause that the policy makers confronted. Participants noted that though inflation, employment, and economic activity generally came in stronger than expected, developments in the banking sector clouded the economic and policy outlook. Fears of recent developments in the banking sector leading to weakening of credit conditions also emerged as some banks were seen tightening lending standards amid rising funding costs and increased concerns about liquidity.

The Committee acknowledged that actions taken to address banking and financial stresses had helped calm conditions in the banking sector. In the backdrop of elevated inflation, the strength of the recent economic data, and the commitment to bring inflation down to the 2 percent longer-run goal, the FOMC judged it appropriate to increase the target range by 25 basis points.

Amidst these developments, the Dollar Index, a measure of the Dollar’s relative strength decreased 0.17 percent overnight to 101.32.

Overall crypto market capitalization is currently at $1.25 trillion, versus $1.24 trillion a day earlier as markets digested the Fed’s monetary policy dilemma.

Bitcoin (BTC) is currently trading at $30,229.69, with overnight gains of 0.71 percent. The 24-hour trading range was between $30,462.48 and $29,725.57.

Ethereum (ETH) outperformed Bitcoin amidst the successful completion of the Shapella (Shanghai + Capella) upgrade. Development effort surrounding Ethereum now shifts to EIP-4844, that would transition the network to a Sharding architecture. The Ethereum Improvement Proposal is an attempt to introduce an interim solution for increasing the block space within the network.

Ether has gained 6.7 percent in the past 24 hours and 7 percent in the past 7 days, proving wrong the fears of an ETH dump post the Shapella upgrade. With the enabling of staked ether withdrawals, the network has fully transitioned to a proof-of-stake consensus mechanism. According to the token.unlocks application, the number of Ether pending withdrawal is pegged at 860 thousand versus the 17.46 million Ether that has been staked. The estimated withdrawal over the next eleven hours is 81.99 thousand.

Bitcoin’s crypto market dominance has decreased to 46.87 percent from 47.6 percent a day earlier. Ether’s crypto market dominance surged to 19.24 percent, from 18.47 percent a day earlier. Stablecoins have dropped to 10.56 percent of the crypto market, from 10.73 percent a day earlier. Share of the residual altcoins increased to 23.33 percent, from 23.2 percent a day earlier.

Amidst the rally, Bitcoin (BTC) jumped to the 10th position in the ranking of all assets published by companiesmarketcap.com, surging past Tesla, Inc. Ethereum also moved up two notches, to the 44th position.

Among the top 100 cryptocurrencies, only 4 cryptocurrencies are trading with overnight losses of more than 1 percent. 45th ranked Stacks (STX) has lost 8.3 percent.

95th ranked WOO Network (WOO) 37th ranked Arbitum (ARB) have gained more than 10 percent overnight.

Arbitum (ARB) however leads losses over the past 30 days with a more than 88 percent decline.

48th ranked Conflux (CFX) tops gains over the past 30 days with a 105 percent surge as well as on a year-to-date basis with a rally of more than 1600 percent.

7 cryptocurrencies led by 76th ranked Huobi Token (HT), 64th ranked Terra Classic (LUNC), 86th ranked Trust Wallet Token (TWT) and 68th ranked Bitcoin SV (BSV) are trading with losses in 2023. HT has lost 25 percent whereas LUNC, TWT and BSV are trading with losses of more than 10 percent on a year-to-date basis.

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