Fed's Dovish Stance Lifts Cryptos

Relief at the dovish pause by the Fed helped cryptocurrencies bounce more than 1.5 percent in the past 24 hours to a market capitalization of $1.3 trillion.

The Federal Reserve maintained rates at a 22-year high but hinted at a potentially prolonged pause, causing global markets to cheer the Fed’s stance.

Despite the monetary policy predicament presented by the co-existence of robust economic growth, strong labor market and inflation that remains way above the Fed’s target, global markets heaved a sigh of relief. Cryptocurrencies gained in tandem with Wall Street’s rally on Wednesday and Thursday.

The CME FedWatch too reflected the mood change, with target probabilities for a pause in the December FOMC review rising to 85.2 percent, from 79.5 percent a day earlier, 80.1 percent a week earlier and 54 percent a month earlier.

The sentiment spilled over to the medium term as well with expectations of interest rate traders revealing a 75.8 percent probability for a pause in January, 66.2 percent probability for a pause in March and 43.6 percent likelihood for a pause in May 2024. In May, the tool shows a close to 40 percent probability of a quarter-point rate cut as well.

Ten-year bond yields in the U.S. traded between 4.62 percent and 4.75 percent, versus the recent multi-year high of 5.02 percent touched on October 23.

The Dollar too retreated, causing the Dollar Index to fall to 105.90, versus the previous close of 106.88 and the recent high of 107.35 touched on October 3.

The bullish momentum in the digital assets market helped the 24-hour trading volume to jump 56 percent to $65.5 billion.

Bitcoin (BTC) rallied, stopping short of touching the $36k level. The 24-hour trading ranged between $35,919.84 and $34,170.69. It is currently trading at $34,963.94, recording an increase of 1.5 percent on an overnight basis, 2 percent on a weekly basis and 111 percent on a year-to-date basis.

Ethereum touched a high of $1,873.88 before dropping to its current level of $1,827.28. Ethereum gained 1.7 percent overnight, 0.7 percent in the past week and 52 percent in the year 2023.

Among the top 10 non-stablecoin cryptocurrencies, Solana (SOL) topped with overnight gains of more than 10 percent. TRON (TRX) lagged with gains of just 0.35 percent.

98th ranked PancakeSwap (CAKE) jumped 28 percent overnight and 29 percent in the past week, limiting year-to-date losses to 50 percent. The rally comes amidst the announcement of listing of USD?-M CAKE Perpetual Contract on Binance Exchange.

95th ranked Oasis Network (ROSE) and 38th ranked Aave (AAVE) followed with an overnight uptick of more than 14 percent. 55th ranked Decentraland (MANA) and 27th ranked Uniswap (UNI), both gained more than 12 percent in the past 24 hours.

46th ranked THORChain (RUNE) slipped 4 percent overnight. 21st ranked UNUS SED LEO (LEO) is the only other cryptocurrency among the top 100 that has declined more than 1 percent despite the overall bullish momentum in crypto sphere.

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