Less than 24 hours before the U.S. Federal Reserve likely resumes its hawkish, monetary path, popular bitcoin was plodding along just above its freshly established $29,000 support.
Other cryptos slogged through an equally dispiriting Tuesday with DOGE the one exception, rising by more than 8% over the past 24 hours, most of the gains occurring after a CoinDesk story suggested that billionaire Twitter owner Elon Musk brazen rebranding of the platform – now called X – could broaden use of the popular memecoin and other cryptos.
Musk has taken a special interest in DOGE with his various pronouncements even before he acquired Twitter, driving the token’s price. “Elon clearly has an affinity for DOGE, almost as part of a running joke, but I wouldn’t be surprised if he actually went through with enabling payments via DOGE,” Brian D. Evans, CEO and founder of BDE Ventures, a Web3 venture studio and advisory firm, told CoinDesk.
Meanwhile, BTC was recently trading at $29,197, up a fraction of a percentage point over the past 24 hours. Bitcoin had tumbled below $29,000 at one point Monday – its lowest level since June – after The Wall Street Journal reported that Binance CEO Changpeng “CZ” Zhao had suggested in a private conversation that the crypto exchange’s affiliates had conducted wash trading several years ago, and China’s policymakers warned of a tortuous economic recovery.
Earlier this month, BTC’s price traveled as high as $31,800 after a partial victory by Ripple Labs in an ongoing legal feud with the Securities and Exchange Commission and amid renewed hopefulness for a long-elusive spot bitcoin ETF. But BTC momentum has waned more recently. The U.S. central bank’s likely decision to raise the interest rate 25 basis points (bps) seems unlikely to stir crypto markets that have been unmoved by recent months’ encouraging macroeconomic events.
Read More: Fed Preview: Crypto Observers See Powell Keeping Door Open for Rate Hikes Beyond July
Indeed, former CoinDesk and Genesis Trading Head of Research Noelle Acheson wrote in her Crypto is Macro newsletter Tuesday that “inflation and rate concerns could be what [has been] keeping crypto prices depressed.”
“Yesterday’s BTC drop was sharp, which normally suggests a programmatic sale,” Acheson wrote. “These usually recover relatively quickly, but the new lower BTC level seems to be holding, reinforcing the idea that there are just not enough new buyers ready to take positions yet.”
Acheson continued: “It’s not clear what will change this situation. There are more potential tailwinds than headwinds at the moment, but new investors appear to lack conviction that the time is right to step in now. When this changes, though, it will change fast.”
Ether, the second largest crypto in market value, was recently changing hands at $1,860, up about 0.5% from Monday, same time. Among other major altcoins, XRP was recently up 0.3%, while SOL, the native crypto of the Solana smart contracts platform sank more than 1%.
The CoinDesk Market Index, a measure of crypto markets performance, was recently up 0.37%. The CoinDesk Bitcoin and Ethereum trend indicators were in neutral territory, a downturn from earlier this month when they held steady in uptrend mode.
U.S. stocks closed up with the tech-focused Nasdaq Composite and S&P 500, which has a hefty technology component, rising 0.2% and 0.6%, respectively as investors savored a continuation of largely upbeat second quarter earnings and brushed off the probably rate increase that would take the federal funds rate to a 22-year high ranging from 525 to 550 bps.
“Some investors may be taking profits as they bet on hawkish language from the US Fed following reports of rising house prices in the worlds biggest economy, which will likely give the FOMC reason to continue hiking rates throughout the year, wrote Tim Frost, CEO of digital wealth platform Yield App, in an email to CoinDesk.
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