Market Wrap: Bitcoin Rise Loses Steam After Fed Comments

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Bitcoin (BTC) backed away from Thursday's high of $42,965 during the New York trading day. The cryptocurrency is showing signs of improving momentum, according to some technical indicators, which could support further upside toward $47,000-$50,000.

On Thursday, Federal Reserve Chair Jerome Powell said raising the benchmark U.S. interest rate by 50 basis points (0.5 percentage point) “will be on the table” for the next Federal Open Market Committee (FOMC) meeting in May. 

So far, tighter monetary policy has been a headwind for speculative assets such as stocks and cryptocurrencies this year.

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Alternative cryptocurrencies (altcoins) continued their lead relative to bitcoin on Thursday, indicating a greater appetite for risk among traders. For example, Tron's TRX token surged by 14%, compared with BTC's flat performance over the same period. The Graph's GRT token also rose by as much as 6% on Thursday.

Stocks were mixed on Thursday, while the 10-year Treasury yield ticked higher toward 2.9% as investors positioned themselves for higher interest rates.

Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.

The chart on the left shows the Altcoin Season Index, using data provided by Blockchain Center. Currently, 29% of the top 50 cryptos have outperformed bitcoin over the past 90 days. 

Theoretically, altcoin season is confirmed when 75% of all cryptos perform better than bitcoin over the same period. By then it's too late to position for a rally, so a reading above 50% could signal a shift from bearish to bullish sentiment among traders.

Still, the chart on the right shows only 41% of the top cryptos have outperformed bitcoin over the past year. That suggests some caution among traders after a strong market rally in 2020.

Upside could be limited over the next few months if buyers are quick to take profits in the altcoin space. For now, risk-on is back.

0x Protocol's token surged over 47% after Coinbase NFT partnership: 0x (ZRX), the native token behind the 0x protocol, has rallied by more than 47% following an announcement that it will power Coinbase's (COIN) non-fungible token (NFT) marketplace. 

ZRX is now nearing a market cap of $1 billion as it trades at a five-month high of $1.09. Read more here.

DeFi data shop Nansen makes first VC investment in gaming analytics firm ZeroDrop: On-chain data platform Nansen is dipping its toes into the blockchain gaming waters, leading a $1.27 million seed round for Web 3 gaming startup ZeroDrop. 

It’s the first time Nansen has invested in an outside firm. Mechanism Capital, Mixmob and angel investors also joined the funding round. Read more here.

Near-based DeFi protocol Bastion to launch BSTN token at a $180M valuation: Near’s largest decentralized finance (DeFi) protocol, Bastion, is launching its own token in a sign of the continued rapid development of the Near ecosystem. 

The BSTN token will trade on Trisolaris, a decentralized exchange on Near’s Ethereum Virtual Machine-compatible layer Aurora, beginning 23:59 UTC (7:59 p.m. ET) on Thursday, April 21. Read more here.

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. 

The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.







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