Bitcoin,Ethereum,Solana and most of the altcoins rallied in prices earlier in the day, and trading volumes also increased. This could be an indication that investors are returning to the market due to the positive economic data. Furthermore, news about institutional investors allocating funds towards cryptocurrencies has also likely contributed to the rise in prices. As inflation cools off, crypto markets look poised for further gains in 2023.
The US Dollar is weakening despite the Federal Reserve stating that inflation is likely to remain low in the near future, which could be a catalyst for further gains in cryptocurrency prices. As central banks around the world continue to print money at record levels, investors are turning towards crypto as an investment option that can protect against currency devaluation.
The market’s rally today was significant, yet its endurance is uncertain until the upcoming Federal Reserve meeting minutes on January 4th that may hint at future interest rate increases.
For the Jan. 6 nonfarm payrolls report and cooling supply chain figures, both crypto and equities markets reacted positively, which could potentially lead to gradual rate increases in the coming months.
With the hints in the FED meeting minutes, it’s possible that markets will experience more upside or might even retract their intraday gains.
Although the crypto market has yet to regain its previous all-time highs, Ether remains resilient; on January 4th of this year, it rallied up to a 3-week high at $1,253. Yet many traders are still anxious about what could happen if Grayscale Ether trust converts to Reg M and allows spot price withdrawals – something that might affect the entire crypto market.
Markets Rally,With Low Volatility
The altcoins and Bitcoin have experienced a period of suppressed volatility, however some analysts anticipate price whipsaws to return. In the interim, BTC’s range bound price action could be benefitting these alts considerably.
Bitcoin is trading at $16,815.70,down by 0.24% after a period of sideways movements. The low volatility has enabled traders to build larger positions at more attractive prices and prepare for the next big bull run.
The top gainers of the day are Helium up by 18.82% ,eCash up by 7.64 while the worst performed altcoin is Huobi Token and Aptos which are down by 10.07% and 5.64% respectively.
Ethereum is trading at $1,249.67, up by 0.05%, having jumped from its dip of $1,052 a month ago.
The crypto market shows signs of stability and strength, particularly as more institutional investors pour money into the space. As traditional markets continue to remain volatile, investors are increasingly turning towards crypto as a hedge against inflation. With more positive economic news and hints of rate increases, 2023 could be the year for a crypto resurgence.
