Crypto market recovers after Fed rate decision, Bitcoin surges 4.4%

Crypto market overview: The crypto market has strongly recovered after two days of continuous decline as the US Federal Reserve chose not to cut down the interest rates. In the last 24 hours, Bitcoin has surged by over 4.4 per cent while ETH has also gained 4.27 per cent. However, Cardano stole the spotlight with more than 14 per cent gains along with AVAX which has surged by over 9 per cent in the last 24 hours. 

The Crypto Fear and Greed Index also reflected the positive sentiment of the market and surged by 7 points in the last 24 hours. The index is currently hovering at 72 points out of 100. 

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CoinDCX Research Team while talking about the crypto market movement in the last 24 hours, said, “Over the last 24 hours, the market displayed positive momentum as both BTC and ETH saw a rally of approximately 3 per cent. BTC reached the $43,000 level and is currently holding just below it, with the 20 EMA D level playing a crucial role. ETH is positioned between two significant levels at $2130 and $2450. The monthly US CPI remaining unchanged is considered positive news, prompting a favourable response from BTC and ETH. This recovery could reflect the market's anticipation of the potential approval of a spot BTC exchange-traded fund (ETF) in January 2024, aligning with notable cash inflows from institutional investors.”

Underlining the role of the US Fed rate decision, CoinSwitch Markets Desk said, “The US Federal Reserve kept its benchmark interest rate the same as before, just like how the markets predicted. As a result, the crypto market saw a recovery rally alongside other asset classes, given the Fed now no longer expects another hike in 2023 but is rather looking at cutting rates in 2024.”

“For Bitcoin, the markets are expecting that the bullish momentum is back. Some analysts are predicting a rally to $50k to capture retail attention before cooling down. In parallel, Cardano (ADA, +17.3 per cent) is on the rise as it is up by more than 50 per cent in the last 7 days. As per blockchain research firm Santiment, the primary reason for this rally is ‘Supply Distribution’ where smallholders are selling while the whales are purchasing. The current ADA rally shows the market is increasingly becoming bullish for altcoins as well and the well-awaited ‘altseason’ might come sooner than later,” added CoinSwitch.

Rajagopal Menon, Vice President, WazirX said, “Bitcoin faced a 5 per cent surge in the last 24 hours, settling at $42,865 on December 14. Despite the fluctuations, indicators and on-chain data show resilience, with bullish efforts to reclaim the $44,000 mark. On-chain insights revealed an ‘over-extended’ state, prompting discussions among analysts.” 

“Prompted by encouraging signals from the Federal Reserve suggesting forthcoming interest rate cuts, the crypto market witnessed a synchronised upswing. Notably, prominent tokens like Avalanche (AVAX), Cardano (ADA), and Injective (INJ) recorded substantial gains, nearing the 10 per cent threshold. Analysts attribute this positive sentiment to the expected expansion of disposable income and increased investments across various asset classes,” Menon added. 

Another popular crypto WorldCoin garnered more eyeballs as it announced its partnership with Minecraft, Reddit, Telegram, and Spotify. WLD is OpenAI’s Sam Altman’s crypto project where a unique ID of each person is created using orbs to distinguish humans and bots.

Crypto market outlook

Sharing an overall overview of the factors driving the crypto market today, Edul Patel, CEO of Mudrex, said, “Bitcoin rebounded to the $43,000 mark following the Federal Reserve's decision to maintain interest rates and signal potential cuts in the coming year. The US Financial Accounting Standards Board (FASB) has also contributed to the positive market sentiment by announcing new accounting rules requiring companies like MicroStrategy, Tesla, and Block to assess their crypto holdings at fair value from 2025 onwards.”

“This regulatory shift enables businesses to capture real-time fluctuations in asset values. BTC encounters resistance at $44,700 and receives support at $40,700. In parallel, Ethereum surpassed its $2,250 resistance, positioning itself for a potential retest at $2,403. The overall market appears bullish, with major cryptocurrencies achieving gains,”

Giving the next target for Bitcoin, Vikram Subburaj, CEO, Giottus, said, “Global markets have rallied after the US Fed held interest rates and indicated rate cuts in 2024. Bitcoin rose by 4 per cent and is now trading just below $43,000. If it successfully manages to hold the current levels, a rally towards $45,000 can be expected in the upcoming days.”

“Among key altcoins, Cardano (trading at $0.66) continues to make significant strides with a 47 per cent weekly gain while Solana’s rally seems to be tapering just above $70. The short-term targets for other key altcoins are: Ethereum ($2,325), BNB ($265), and Avalanche ($40).”