Top 3 cryptocurrencies defying negative sentiment after Fed's hawkish pause: UNI, ALGO and Terra LUNA Classic
|- Bitcoin, Ethereum prices plunged after the US Fed signaled additional interest-rate increases before the end of 2023.
- Uniswap, Algorand and Terra LUNA Classic price saw gains amid a broad market decline.
- UNI’s release of v4 code, Algorand’s recent partnerships and Terra Classic’s release of v2.1.1 parity upgrade have acted as catalysts.
Crypto prices declined sharply in response to the US Federal Reserve’s stance on interest rate hikes but some assets such as Uniswap (UNI), Algorand (ALGO) and Terra Classic (LUNC) shrugged off the broader market sell-off.
The Federal Open Market Committee (FOMC), under the chairmanship of Jerome Powell, decided to pause their aggressive interest rate hiking cycle on Wednesday. After ten increases since the beginning of 2022, the Federal Reserve left interest rates unchanged, buy signaled that two additional rate hikes could be on the way before the end of 2023. This possibility triggered a wave of negative sentiment among crypto asset holders, resulting in a steep decline in Bitcoin, Ethereum and altcoin prices.
However, developmental updates and partnerships in Uniswap (UNI), Algorand (ALGO) and Terra LUNA Classic (LUNC) fueled a rally in these tokens, yielding gains for holders. =
Also read: Ripple, Binance and Coinbase score partial wins against US SEC, mark milestone in crypto history
Federal Reserve takes hawkish pause
The US Central Bank concluded its two-day meeting on Thursday with a “hawkish pause”. FOMC members indicated their expectations for rates further out through the so-called “dot plot”. The dots moved upward, meaning that the median expectation for interest rates increased to 5.6% by the end of the year, higher than the previous projection of 5.1%.
FOMC dot plot for June 2023
The FOMC Dot Plot comprises up to 19 dots through which individual members of the committee indicate where they believe the Federal Funds rate should be in the future. The dot plot is commonly viewed by investors and economists for gauging potential changes in monetary policy.
The projected terminal rate is 5.6% as of June 2023, implying two more hikes before the end of the year. An interest rate hike makes the US Dollar more attractive to investors, driving capital out of risk assets. The possibility of two rate hikes at the end of the year triggered steep declines in cryptocurrencies like Bitcoin, Ethereum and top altcoins.
Bitcoin price declined 4.7%, from $26,205 on Wednesday to $24,951 at the time of writing, based on data from Binance. Ethereum price dropped 6.6%, hitting $1,633. Prices of the top 30 altcoins by market capitalization declined between 3% and 8% overnight.
Amidst the bloodbath, three tokens yielded gains for holders. UNI, ALGO and LUNC prices climbed 4.3%, 1.6% and 1.6% since Wednesday, respectively.
Catalysts driving UNI, ALGO and LUNC prices higher
Uniswap’s launch of its version 4 code on June 13 highlighted features that attracted developers to the protocol. The release of the source code is the first step for Uniswap to engage with the community members and drive UNI adoption,acting as a bullish catalyst for UNI price. UNI price increased by 11.37% on Binance since Tuesday.
Algorand recently announced a partnership with blockchain cloud company Seracle to drive blockchain adoption for web3 companies. The partnership reduces blockchain costs by as much as 90% for web3 projects. ALGO price climbed nearly 2% since Wednesday.
Terra LUNA Classic’s core developer group, the Joint L1 Task Force (L1TF) successfully completed the v2.1.1 parity upgrade on Wednesday at 13:57 GMT. Since the upgrade, the token rallied 7.7%. LUNC price is $0.00009750 at the time of writing.
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