- 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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Celebrity meme coins controversy continues amid Pump.fun revenue dominance
Pump.fun outperformed the Ethereum blockchain on Tuesday after raking in $1.99 million. Following this achievement, a meme coin based on actress Sydney Sweeney was the subject of controversy after its developers dumped their bags on investors.
PEPE's on-chain metrics indicate potential rally after weeks of silence
PEPE has struggled to see any significant price move after reaching an all-time high in May. Increased adoption rate and low MVRV ratio indicate a bullish run may be on the horizon. A single PEPE outflow from Binance worth $14.7 million gives credence to signs of bullish expectation.
Ethereum has failed to overcome key resistance despite bullish sentiment surrounding ETH ETF
Ethereum (ETH) is down more than 1.4% on Tuesday following another ETH sale from the Ethereum Foundation. Meanwhile, crypto exchange Gemini's recent report reveals that ETH ETF could see about $5 billion in net inflows within six months of launch.
Crypto community blasts Polkadot following report of treasury spending
Polkadot reports $87 million of treasury spending during H1. Crypto community members expressed harsh feelings toward the DOT team's high spending. DOT is up more than 2% in the past 24 hours but risks correction following the report.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.