Top Cryptocurrency Surprises by Soaring Over 10% on Thursday
Profit-taking in the cryptocurrency market: Bitcoin (BTC) drops nearly 4% to $23,600 after surpassing August highs on Thursday. Meanwhile, Ethereum (ETH) falls 1.6% to $1,650.
Summing up the week, it could be said that it has been volatile in the cryptocurrency market. Although cryptocurrencies were expected to continue falling, suddenly bitcoin surpassed $25,000 for the first time since August, which was interpreted as renewed optimism.
However, cryptocurrencies have returned to the reality of the stock market. According to Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank, the bad producer price data and the "disastrous" manufacturing index of the Federal Reserve of Philadelphia have affected investor sentiment.
The Philly Fed Manufacturing Index fell to -24.3 points from the previous -8.9, well below the expected slight improvement to -7.4 points, "putting paid to the idea that the economy is strong, without fuelling expectations of a Fed rate cut, as inflation slowdown needs to be addressed for some time more", explains Ozkardeskaya.
Meanwhile, the presidents of the Cleveland and St. Louis Feds, Loretta Mester and James Bullard, respectively, expressed their inclination for a 50-basis-point interest rate hike. "Fortunately for equity bulls, neither Mester nor Bullard vote this year. But their non-voting status did not make their comments any less scary", notes Swissquote Bank's expert.
"The Fed minutes next week may shed some more light on that thought process, but their comments also raise the issue that even if there was no compelling case for a 50bp move at that time, certainly the data since then suggests there may be a stronger argument for a 50bp move in March", says Michael Hewson, chief market analyst at CMC Markets UK.
The main news in the cryptocurrency sector this week also doesn't leave much room for optimism. On the one hand, the court overseeing the criminal case against Sam Bankman-Fried could modify the terms or even revoke the bail of the FTX founder. Judge Lewis Kaplan believes that the violation of the conditions of his probation is sufficient grounds to consider that there is "probable cause to believe that he has committed or attempted to commit a federal offense while on release, namely, witness tampering."
On the other hand, reports that Binance could pay a fine to settle possible legal violations committed in recent years have not been well received. Even less so when considering the recent regulatory action on the Binance USD (BUSD) token, which some experts believe has more to do with the money laundering investigation hovering over the exchange than with the SEC's stance on stablecoins. In addition, the Commission has sued Do Kwon, founder of Terraform Labs, for defrauding investors in the collapse of Terra.
In the rest of the market, significant drops in almost all major altcoins. Only polygon (MATIC) and polkadot (DOT) have a positive balance in the last 24 hours.