By Ambar Warrick
Investing.com -- Bitcoin rose sharply on Tuesday, clearing the $30,000 level for the first time since June 2022 as markets bet on a less hawkish Federal Reserve in the coming months, while sentiment also improved amid easing fears of a banking crisis.
The world’s largest cryptocurrency rose 6.3% to $30,061.0 by 01:23 ET (05:23 GMT), its highest level in 10 months. The token also largely led gains across its cryptocurrency peers, with Ethereum up 3.3%, while Binance Coin and Ripple added 4.6% and 2.3%, respectively.
Gains in Bitcoin also pushed total crypto market capitalization to $1.4 trillion. Tuesday’s gains put Bitcoin up roughly 80% this year, vastly outperforming most other asset classes.
Bitcoin’s latest rally comes amid a broader improvement in sentiment as markets began pricing in the potential for a limited number of interest rate hikes by the Fed in the coming months, especially as the U.S. economy cools further.
Stock markets also logged a strong rally on Tuesday following this notion. While the Fed is likely to hike interest rates at least one more time, dollar index futures indicate that markets are positioning for an eventual pause, or even reversal in the Fed’s hawkish stance.
A less hawkish Fed bodes well for Bitcoin and other cryptocurrencies, as a sharp rise in interest rates wiped out over two-thirds of total crypto market capitalization through 2022.
Focus this week is on consumer price index inflation data and the minutes of the Fed’s March meeting, for more cues on the path of interest rates.
Bitcoin has been on a tear over the past month, ducking fears of a banking crisis as the token attracted some safe haven plays amid concerns over a broader collapse in the banking system.
But relatively low trading volumes also made for bigger price moves in the token, especially as its tumble through 2022 soured investor sentiment towards cryptocurrencies.
A string of high-profile scandals and bankruptcies also kept investors wary of cryptocurrencies, while U.S. authorities engaged in a regulatory crusade against the space.