Bitcoin dipped early Thursday but regained its footing near $24,000 as investors continued to weigh minutes from the U.S. central bank’s Federal Open Market Committee(FOMC) meeting earlier this month and the latest economic data.
The largest cryptocurrency by market capitalization was trading at 23,921, a 0.5% gain from Wednesday, same time but down from its weekly high of over $25,000, according to CoinDesk data. Crypto markets have been struggling to gain traction amid ongoing macroeconomic uncertainty.
“The market has not been able to kind of get over that hump,” Joel Kruger, market strategist at institutional crypto exchange LMAX Digital, told CoinDesk in an interview.
“Until we do that, I think there continues to be the risk that it’s possible that we’re still in this big consolidation off of that downtrend that we saw,” he said.
Ether (ETH), the second-largest cryptocurrency, was up 2.1% to recently trade at $1,650. The CoinDesk Market Index, which measures overall crypto market performance, was up 1.1% for the day.
Equities markets edged higher, with the S&P 500 index recently up 0.5% after a four-day sell-off.
Wednesday’s FOMC minutes release offered monetary doves and hawks alike some hope, although the heavy likelihood of a 25 basis point rate hike was unchanged.
The CME FedWatch Tool shows that less than three in four traders currently foresee a 25 basis-point hike, while over one in four expect a 50 basis-point hike at FOMC’s next meeting in March.
In an email to CoinDesk, Bob Ras, co-founder of exchange and digital asset ecosystem Sologenic, wrote that while the Fed’s continued monetary tightening could dampen the crypto market’s performance, Asian central banks, including Japan and China, have been injecting liquidity into their respective markets, suggesting the recent rally “still has legs.”
“The amount of quantitative easing in Japan alone has been truly astronomical – so much so that this form of yield curve control has all but negated the tightening performed by the Fed over the last year,” Ras wrote, adding that “bitcoin and crypto are particularly sensitive to these kinds of fluctuations” as the money supply abroad is expanding.