Bitcoin Price Surpasses $37,000, Altcoins Rally

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After days of the doldrums, Bitcoin returned to $37,340 in Tuesday afternoon trading. That’s a 3.8% increase from the previous 24 hours, according to CoinMarketCap. After recouping losses on a volatile Monday afternoon, the digital currency continued to rise throughout Tuesday. Still, Bitcoin remains 46% below its 52-week high of nearly $69,000 in November. Much of the cryptocurrency world has rallied after the past few days of decline.

This volatility comes as the Federal Reserve meets today and Wednesday to discuss the economy and when to raise interest rates as inflation rises. With rates poised to spike over the next few months and possibly multiple times this year, the cryptocurrency has been hit hard almost universally over the past few months.

Ethereum is up 5.4% in the past 24 hours, for a price of $2,497. Despite this gain, the second-largest cryptocurrency is still down more than 49% from its 52-week high of nearly $4,900, which it hit last November. It has decreased by more than 32% in 2022.

Many other popular altcoins rallied in the last 24 hours:

Avalanche – up 13.5% Solana – up 11.0% Dogecoin – up 9.0% Binance Coin – up 6.0% XRP – up 3.8% Terra – up 1.8%

However, like Bitcoin, most of these cryptocurrencies rose somewhat cautiously on Tuesday.

Bitcoin Hovering Above Six-Month Lows

The price of bitcoin has been under severe pressure since the Federal Reserve meeting in early November, when the central bank announced that it would start reducing its bond purchases, reducing the stimulus to the financial system.

This downward trend continued through much of December and into January. After peaking above $51,000 in late December, the digital currency fell to nearly $33,000 in late January. After the most recent drop, Bitcoin is trading above the six-month lows set on Monday.

Fed cuts stimulus as inflation ripples through economy

At its December meeting, the Fed announced it was increasing the pace of its cut, buying even fewer bonds than it had planned in November. The new pace means the Fed will stop buying bonds by March 2022.

From there, the Fed said it would eventually raise interest rates, if conditions warranted it.

“With inflation having been above 2% for some time, the committee expects it to be appropriate to maintain this target range until labor market conditions have reached levels consistent with the assessments of the maximum employment committee,” the Federal Open Market Committee said in a prepared statement. .

Now, market analysts expect the Fed to raise interest rates at its next meeting in March. According to CME’s FedWatch tool, the market is pricing in an 88% chance of the Fed raising rates by 25 basis points, with a 5% chance of a 50 basis point hike.

While Bitcoin’s price peaked at $68,990.90 in early November, the value of the cryptocurrency has steadily weakened since then. Nevertheless, Bitcoin remains at the top of the list of the most valuable cryptocurrencies by total market capitalization.

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Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. Further, investors are cautioned that past performance of investment products does not guarantee future price appreciation.

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