The Federal Reserve of the United States announced a rise in interest rates by 50 basis points on Wednesday, May 4, to combat rising inflation. The news was very much on the expected lines, and the equity market in the United States, as well as the cryptocurrency market, both rallied shortly afterward.
The price of Bitcoin (BTC) has risen 5% in the last 24 hours, bringing it closer to $40,000. BTC is currently trading at $39,902 with a market capitalization of $755 billion as of press time. The broader crypto market is also up 5%, boosting investors’ wealth by more than $80.
Bitcoin’s breakout on Wednesday follows similar breakouts in the S&P 500 and Gold. Santiment, an on-chain data provider, explains:
“The #Fed made their move as expected today, with a 50 basis point interest rate rise. Unsurprisingly, the impact shifted #bullish almost immediately for #crypto, just as it did after the March hike. We may have another #selltherumorbuythenews scenario”.
Today’s breakout and candle formation, on the other hand, is a signal that Bitcoin has broken over the multi-week resistance. If Bitcoin can manage to move past $40,000, it has the potential to rise to $42,000 and $45,000.
Altcoins Market Sees Gains
As we have noticed, Ethereum (ETH) has been closely following BTC’s movements this year. As a result, the world’s second-largest cryptocurrency is also up 5% and now trades at $2,940. As of press time, Terra’s LUNA and Ripple’s XRP are both up 5%. Furthermore, ETH’s technical charts are displaying some bullish signals as well.
Solana (SOL), Cardano (ADA), and Avalanche (AVAX) are among the top ten cryptocurrency movers. The price of Solana has increased by 10% and is currently trading at $95.
Cardano (ADA) and Avalanche (AVAX) both had a strong breakout, gaining over 13% each. But it is still unclear whether this is a real trend reversal or merely a temporary breakout.