The crypto market remains unfazed by interest rates

Market overview

The crypto market has risen by 1.2% over the past 24 hours. The Fed’s key rate hike did not trigger a significant reaction, despite a brief spike in volatility; traders subsequently focused on buying on dips. At the same time, it is worth noting the continued growth of certain altcoins. The rapid rise driven by specific ideas is an important sign of a fundamental shift in sentiment. The top performers over the past 24 hours were NEAR Protocol (+18%), Zcash (+17.5%) and Dash (+15%). The underperformers were Filecoin (-1%), Hedera (-0.1%) and Tron (+0.1%), which clearly illustrates the market’s bullish shift over the last day.

The cryptocurrency sentiment index, by contrast, points to caution, having fallen to 50 from 51 the previous day. This is hardly a cause for alarm, as the index has been above 50 for around four weeks, following nearly a year spent in the lower half of the range (with brief exceptions).

Bitcoin reacted only slightly to the outcome of the Fed’s key interest rate decision, in contrast to the rather turbulent reaction from traditional markets. It appears as though the leading cryptocurrency overreacted negatively to the failure of the CLARITY Act, which provided it with temporary immunity against declines triggered by other news and helped it withstand the strengthening of the Dollar.  

News background

Spot Bitcoin ETFs in the US recorded their largest outflow since 25 June (over $450 million) following the failure of the CLARITY Act to pass a vote in the US Senate.

Following the failure of the vote on the CLARITY Act, the main responsibility for regulating the crypto market will pass to the US Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), according to Bernstein. They also expect accelerated development of regulations for native tokens, DeFi and tokenised shares.

The aggregate mining output of public Bitcoin miners fell below the break-even point in the second quarter, according to CoinShares. Bitcoin ended the quarter at $58.4K, while the average cost of mining 1 BTC stood at around $75.5K. Hashprice, a key indicator of miners’ profitability, hit a new all-time low in June.

According to Lookonchain, the largest US miner, MARA Holdings, purchased a further 1,292 bitcoins at an average price of $76.3K per coin. The company’s crypto reserves have risen to 35,577 BTC, making it one of the world’s largest publicly listed corporate holders of Bitcoin.

Developers have moved on to the final testing phase of Bitcoin Core 32.0. The update will change the fee estimation mechanism, speed up block validation when reading data from disk and fix the vulnerability in walletnotify.

Summary: The crypto market is rising, ignoring the Fed’s caution: altcoins are leading the way, Bitcoin is holding steady, and sentiment remains above neutral.