Solana led gains among larger tokens amid a broader jump in global markets. The crypto market has added almost $59 billion in value over the past day following the U.S. Federal Reserve decision to gradually reduce stimulus benefits and taper purchases of government bonds after inflation climbed to a 39-year high.

Tokens of Solana, the fifth-largest crypto by market capitalization, climbed 12% Thursday to $180. Ethereum rivals avalanche and elrond were also among top gainers in early European hours, adding 11% and 13% respectively, according to CoinGecko data. Dogecoin and shiba inu saw muted growth after a rise earlier this week based on reports of electric-car maker Tesla allowing dogecoin payments for its merchandise.

Since early 2020, the U.S. has provided stimulus packages to businesses and individuals and the Fed has purchased nearly $120 billion in bonds each month to boost the economy. That’s helped prop up financial markets worldwide, while becoming a cause for concern among traders worried about the incessant money printing.

Yesterday’s decision bore well for the crypto market, however. While bitcoin, the world’s largest cryptocurrency by market capitalization, is considered a risky asset by many investors and traders because of its volatility, some view it as a hedge against inflation.

“Increased speed of tapering by the FED has been a typical buy the rumor sell the news story. Markets are looking for a tighter monetary policy as a response to record inflation,” Andreja Cobeljic, co-founder of trading intelligence tool Superalgos, said in a Telegram message. ”The short-term correlation between equities and bitcoin is positive and Bitcoin also rose very sharply. It is worth noting that retail buying of Bitcoin has been extremely strong on the lows, recent onchain data shows.”

Bitcoin, ether see green

Bitcoin jumped from $46,000 to over $48,800 on Wednesday after the Federal Reserve meeting. It’s still battling a resistance level of $50,000, one it has tried to break on three occasions this month.

Futures traders are continuing to lean toward the upside, data from analytics tool Glassnode suggests. Funding rates – an hourly or daily fee paid by traders to borrow money from exchanges to place trades – remained positive, implying traders were paying to remain long on their bitcoin positions.

Ether gained ahead of bitcoin with a nearly $450 jump from weekly lows of $3,656 to above $4,000 at press time. The move helped alleviate earlier losses, but ether remains down 10% compared with a week ago. Funding rates for ether futures on Glassnode are negative, meaning more traders are paying to bet against ether’s upside.

Ethereum

Meanwhile, crypto funds like Singapore-based QCP Capital remain bullish on crypto markets continuing their upside.

“We think that a short squeeze into the year-end or early January is very possible,” the fund wrote in a Telegram broadcast on Thursday. “Bullish divergences in ETH support our bullish bias and we expect both ETH and Altcoins to outperform on a short squeeze.”

A short squeeze occurs when the price of a financial asset suddenly moves higher, prompting traders who’d bet it would fall to buy the asset in order to avoid greater losses, amplifying the increase. Bullish divergences, on the other hand, occur when asset prices fall to local lows but market momentum indicators do not, suggesting a lack of sellers in the market.


All writers’ opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by CoinDesk constitutes an investment recommendation, nor should any data or Content published by CoinDesk be relied upon for any investment activities. CoinDesk strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.

Recommended content


Recommended Content

Editors’ Picks

Litecoin Price Prediction: LTC tries to retake $100 resistance as miners halt sell-off

Litecoin Price Prediction: LTC tries to retake $100 resistance as miners halt sell-off

Litecoin price grazed 105 mark on Monday, rebounding 22% from the one-month low of $87 recorded during last week’s market crash. On-chain data shows sell pressure among LTC miners has subsided. Is the bottom in?  

More Litecoin News
Bitcoin fails to recover as Metaplanet buys the dip

Bitcoin fails to recover as Metaplanet buys the dip

Bitcoin price struggles around $95,000 after erasing gains from Friday’s relief rally over the weekend. Bitcoin’s weekly price chart posts the first major decline since President-elect Donald Trump’s win in November.

More Bitcoin News
SEC Commissioner Hester Pierce sheds light on Ethereum ETF staking under new administration

SEC Commissioner Hester Pierce sheds light on Ethereum ETF staking under new administration

In a Friday interview with Coinage, SEC Commissioner Hester Peirce discussed her optimism about upcoming regulatory changes as the agency transitions to new leadership under President Trump’s pick for new Chair, Paul Atkins.

More Cryptocurrencies News
Bitcoin dives 3% from its recent all-time high, is this the cycle top?

Bitcoin dives 3% from its recent all-time high, is this the cycle top?

Bitcoin investors panicked after the Fed's hawkish rate cut decision, hitting the market with high selling pressure. Bitcoin's four-year market cycle pattern indicates that the recent correction could be temporary.

More Bitcoin News
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy

Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy

Bitcoin price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot ETFs in January and the reduced supply following the fourth halving event in April.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP