stub Bitcoin Reclaims $24K on FOMC Minutes Release, Stacks (STX) and Tezos (XTZ) Up Double Digits -
Connect with us

Bitcoin News

Bitcoin Reclaims $24K on FOMC Minutes Release, Stacks (STX) and Tezos (XTZ) Up Double Digits




The crypto market embraced a minor pullback on Tuesday amid growing selling pressure and heat from the recent crackdown by market regulators. Bitcoin assumed a downward course towards $23,580 on Wednesday after suffering multiple rejections around $25,200 earlier this week. The leading asset has, however, displayed resilience in the face of the recent turmoil in the US regulatory landscape. In the last few hours after the US markets bell, Bitcoin has recovered swiftly from $23,600 to $24,480, where it hovered at press as speculators take in the freshly released Federal Open Market Committee (FOMC) minutes. Here is everything on the midweek market action

Federal Reserve releases minutes from Feb meeting

The US Federal Reserve on Wednesday afternoon shared the minutes of the meeting held by banking officials at the start of February, revealing that some members called for a 50 basis points hike. The central banking authority settled on a 25-basis point rate increase in the end. Analysts at the CME Group have already wagered there is a 76% chance that the Fed's next adjustment in March will be another 25 basis points.

Target probabilities for March Fed meeting

Markets staged no immediate reaction to the minutes' release, but the implication that the central bank acknowledges inflation is cooling has seen prices slightly move north.

Analyst give their take on why Bitcoin stalled at $25K and what lies next

The BTC/USD pair has failed to breach the $25K resistance level despite several attempts since the end of last week. The latest rejection episode caught the eyes of market observers who opine it is reminiscent of events in August 2022 that sent the prices to as lows as $18k. Though not an immediate cause for concern, the inability to maintain a foothold above this crucial level could set up bears to pull lower prices across the board.

Traders have parked their cash, waiting

Laurent Kssis, a trading adviser at CEC Capital, told CoinDesk this week that the Bitcoin market is waiting for tech firms to start looking up before it can log any substantial upward movement. The point of truth will have to be after next month when these firms start reporting their Q1 earnings. Most crypto companies have been sharing their fourth quarter (Q4) reports in the last two weeks. Coinbase's Q4 earning reports came out earlier this week, indicating a bump in revenue against a shrinking user base.

Activity on trading platforms suggests Kssis theory is not far-fetched. With a market cap of $70.5 billion, the world's largest stablecoin USDT's crypto market dominance has remained around 6.5% since January, evidence that traders are parking their cash with the pegged asset. The CEC Capital adviser concluded that markets are waiting for a tell of when the unrealized profits on USDT start flowing back into Bitcoin and Ethereum before they can rally again.

On-chain volume and active addresses are not tagging along with the bulls

Bitcoin has, thus far, tracked almost 50% in gains since the turn of the year. Still, analysts advise caution since the asset has still not demonstrated the level of activity and on-chain volume expected of a bull market. Active addresses indicate transaction activity between one party sending Bitcoin and the recipient. In a recent blog post, CryptoQuant contributor Yonsei_dent noted how this market's run is like no other before since on-chain volume and active addresses are not tagging along with the bullish narrative.

The pseudonymous contributor pointed out that the 30-day moving average of active addresses increased during both the reversal of the bull market in 2019 and during the recovery from the impact of COVID-19 in 2020. However, no such trend has been observed in 2023, at least not yet. In the latest edition of ‘The Week On-Chain' newsletter, blockchain data and analytics platform Glassnode observed that transfer volumes remain low for both long-term and short-term holders, despite a recent ATH in Bitcoin unspent transaction output (UTXO) and growth in on-chain activity.

Motives of large-volume exchange traders questioned

Market commentators attributed last weekend's back-and-forth action at around $25K to the activity of whale Bitcoin traders on exchanges. Attempts to sway the market with mass bids and ask liquidity are not uncommon at crucial trading levels.

BTC/USD chart. Source: TradingView

Michaël van de Poppe, CEO of trading firm Eight, remarked on the teetering and correction swings, pointing out that the dip could push prices even further, though it is only temporary.

“Markets correcting, which is great for people who look for entry points. Might go down a bit more from here before we'll turn around. Week of consolidating before continuation,” he wrote.

In the medium term, van de Poppe anticipates a revisit to $35K followed by a correction.

“Corrections remain to be relatively shallow. I think that we'll continue the run towards $35-40K before we'll have a harsh correction, maybe even to $20-25K,” he said in another tweet.

Not everyone is convinced of potential mild gains, though.

“IMO, until we see full candles above the 200 WMA this is still distribution in a bear market rally, and with the bid wall above $24k, shorting from this level has about as much short-term risk as longing,” Material Indicators remarked on the market set up in a Feb 21 tweet.

Meanwhile, Bitcoin dominance has recovered to 44.70% after retracing slightly to 42% in the first week of February.

To learn more about Bitcoin, check out our Investing in Bitcoin guide.

Tokens roundup

The majority of altcoins cooled off from modest rallies pulled off early this week but have since followed Bitcoin's ascent since the FOMC minutes release. Ethereum has demonstrated near-similar behavior as Bitcoin, with the ETH making up for lost ground at $1,669. Polygon's MATIC has bounced back to $1.41 from $1.36, where it dipped after news that the Ethereum scaling platform cut 20% of its workforce.

DEX aggregator 1inch announced on Monday that it crossed 1.4 million users on the Polygon network. Following the update, there was a surge in the price of the platform's native token 1INCH. In the last seven days, 1INCH price has moved up 17%. This growth momentum has contributed to the positive outlook for the DEX, further solidifying its year-to-date progress, which now stands at 65%. The multichain price aggregator was initially built on Ethereum but has since spread to other chains, including Polygon, BNB Chain, and Avalanche, as it seeks growth.

1INCH gains

Stacks (STX) which has soared 115% in the last five days, is still the top gainer, ahead of Optimism, Enji Coin and Tezos. STX is up 22% leading Thursday’s best performers, followed by XTZ and OP, trading 15% and 14% higher today. The STX token has benefitted from the spotlight on Ordinals, Bitcoin's version of NFTs, which have increasingly become popular within many crypto circles. The Ordinals protocol allows inscriptions to live on the Bitcoin blockchain, and with growing interest, the NFT-like assets have been the reason for surging activity on the network.

STX/USDT chart

Glassnode observed that the rapidly growing demand for on-chain transactions is backed by a surge in inscription activity on Bitcoin and is the largest wave of transaction momentum since January 2021. The network has, to date, processed 3.2 million transactions involving 8.155 billion STX tokens, according to the Stacks on Chain dashboard tool. The native token of the Bitcoin-adjacent Stacks platform set a new nine-month high of $0.84 late Wednesday. Though the rally took a break at $0.81, latest market activity has shown it could be in more gains in the short-term.

Worth noting, the wider market's recovery from its November FTX-fueled lows coincides with a return of interest in digital assets by Hong Kong which once held the mantle of a crypto hub before China's crackdown on cryptocurrencies.

To learn more about Stacks or 1inch, visit our Investing in Stacks and Investing in 1inch guides.

Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.