It has been an eventful week for cryptocurrencies. The rallying of Bitcoin and Ethereum ignited a reignited surge in the crypto market, leading many altcoins, like Solana and Cardano, to blow up and soar high. This week marked several milestones in the crypto space, as Bitcoin (BTC) and Ethereum (ETH) crossed the $30,000 and $2,100 levels, respectively, for the first time since last year.
Relief for Crypto Investors: Inflation Lower Than Expected
The surge in Bitcoin and Ethereum prices was fueled by the latest US inflation figures, which come as a relief for investors. In March, inflation was reported to be lower than expected, providing a glimmer of hope that the Federal Reserve may back down from its policy of raising interest rates which make it more expensive to borrow money and subsequently turn away investors from risk-on assets such as crypto and stocks.
Ethereum (ETH) capitalised on the hype that surrounded its long-awaited Shapella upgrade – which went live on Wednesday. The upgrade allows for withdrawals of Ethereum staked on the network, unlocking an estimated $34 billion of ETH in the process. This same upgrade also provided a much-needed life source to the Ethereum market.
Cryptocurrency Market: Ethereum, Bitcoin, Solana Gains
AIMed analyst Will Tamplin commented in an email: “Ether and bitcoin have both seen upside follow-through after confirming base breakouts in late March, which are as positive intermediate-term developments on their charts”, noting that ETH and BTC’s next major resistance levels are roughly $2,400 and $35,900, respectively.
Solana (SOL) reaped the biggest rewards among the top thirty cryptocurrencies, gaining 16% and currently trading for $23.91. Investors’ interest was piqued in Solana following the release of Saga, an Android phone powered by the Solana blockchain, on April 13. The device gives users a seamless way to access Solana’s vast array of applications and projects.
Cryptocurrency Markets Outperform Equity Markets
Meanwhile, equity markets finished off on a lower note, with the S&P 500, tech-heavy Nasdaq and Dow Jones Industrial Average falling 0.2%, 0.3%, and 0.4%, respectively. Cryptocurrency markets, in contrast, escaped relatively unscathed with the CoinDesk Market Index up 6.6% for the week.
Crypto Rally: Regulatory Watchdogs Take Notice
The positive sentiment witnessed in the cryptocurrency space this week has been echoed globally. In the UK, authorities inked a bailout deal in which HSBC bank acquired the arm of Silicon Valley Bank (SVB) for £1 to safeguard British firms’ exposure to the bank.
In the US, Federal Reserve, US Treasury, and FDIC have all announced that they will underwrite all deposits in SVB and Signature Bank. Reinforcing this, US President Joe Biden also took a stand against notorious Crypto pioneer and founder of US giant Signature Bank, Fred Wilson, who have sought to enter the crypto banking space. All of this is sending the message that there is still a long way for cryptocurrencies to go and that regulators are watching carefully.
In the days ahead, investors will be watching to see if the rally in cryptocurrencies continues and if altcoins like Solana and Cardano (ADA) can keep up their momentum. With Bitcoin and Ethereum also pushing major milestones, crypto investors may be in for a wild ride.
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