The cryptocurrency market in the past week has been fairly resilient despite the arrest of Sam Bankman-Fried and the interest rate hike announced by the Federal Reserve (Fed). The market cap fell marginally from $859 billion on December 12 to $852 billion on Friday. The prices of Bitcoin are up 1.5 per cent to $17,505, according to data from CoinMarketCap. Ethereum is flat at $1,277.
On December 15, Bitcoin touched its five-week high of $18,400.
“Despite the week starting sideways movement in the markets, there’s a good run on account of CPI data and interest rate hike towards the end of the week. While both of these created a good environment for markets to run up, a slight drop post the rate hike was seen owing to higher than the expected terminal rate of more than 5.1 for next year,” Anurag Dixit, founder of the Crypto asset management platform Kunji said.
SBF was arrested in the Bahamas on December 12. The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have charged him with fraud and misappropriation of funds. More clarity on the case has yet to emerge. Also, the future of crypto firm Genesis remains murky.
During the week, the crypto market cap touched $885 billion before Fed announced a rate hike of 50 basis points (bps) and maintained its hawkish commentary on inflation. The rate hike was, however, lower than the earlier 75 bps.
“Crucially, Bitcoin and Ethereum briefly traded above important levels of $18,000 and $1,300, respectively,” Parth Chaturvedi, crypto ecosystem lead of crypto investment company CoinSwitch, said.
“The main reason behind the market’s buoyancy is the improvement in macro conditions, with monthly US inflation rising below expectations at 7.1 per cent and a subsequent slowdown in the quantum of the Fed’s interest rate increase to 50 bps. Amidst the market downturn, Goldman Sachs is looking for a silver lining in the form of crypto investments, M&A and buyouts, as industry-wide valuations correct,” he added.
Crypto prices: What to expect next week?
“Bitcoin’s support is currently at $17,100, and its resistance is at $17,550. Until Bitcoin is above $18,000, bears may have more influence than bulls,” Alankar Saxena, CTO of crypto investment platform Mudrex, said.
“Ethereum’s support is at $1,150, and its resistance is at $1,350, which could attract buyers back to the market,” he added.