Bitcoin, Ethereum, Dogecoin Gains Trail Stocks — Fed Chair Warns Of Pain Yet To Come In Fight Against Inflation

Zinger Key Points
  • Bitcoin, Ethereum, Dogecoin rise following rally in stocks on Tuesday
  • Dollar index falls to lowest since May 6, downwards momentum could bring relief for risk assets - Michaël van de Poppe
  • Chartist Ali Martinez suggests $22,380 and $15,110 range for Bitcoin bottom

Bitcoin and other major digital coins were in the green at press time, as the global cryptocurrency market cap increased 2.7% to $1.3 trillion.

Price Performance Of Major Coins
Coin 24-hour 7-day Price
Bitcoin BTC/USD 1.8% -1.9% $30,563.82
Ethereum ETH/USD 3.2% -10.95% $2,100.90
Dogecoin DOGE/USD 2.7% -16.8% $0.09
Top 24-Hour Gainers (Data via CoinMarketCap)
Cryptocurrency 24-Hour % Change (+/-) Price
Convex Finance (CVX) +12.6% $12.43
Kusama (KSM) +11.8% $82.14
ZCash (ZEC) +11.2% ​​$114.04

Why It Matters: There was a considerable improvement in risk appetite on the equities side amid rallying markets on Tuesday, but the cheer on the cryptocurrency side was muted.

The S&P 500 and Nasdaq closed 2% and 2.8% higher, respectively, on Tuesday and at press time, U.S. stock futures rose slightly. 

In an interview with the Wall Street Journal, U.S. Federal Reserve Chair Jerome Powell doubled down on fighting inflation and said there could be some pain involved. He said, “Restoring price stability is a non-negotiable need. It is something we have to do”

“We will go until we feel we’re at a place where we can say financial conditions are in an appropriate place, we see inflation coming down."

Bitcoin’s rebound is underperforming stocks as investors remain unsure of the “regulatory gauntlet” faced by the cryptocurrency universe, according to OANDA senior market analyst Edward Moya.

The regulatory pressures have been exacerbated due to the collapse of the Terra USD (UST) algorithmic stablecoin last week.

“Stablecoins will continue to get all the attention and until Wall Street is convinced all the major ones will be able to handle any future stresses. Guidelines for how stablecoins are backed and better transparency on how they apply their pricing mechanisms will be required,” said Moya, in a note seen by Benzinga.

The dollar index, a measure of the greenback’s strength against six other currencies, fell to 103.41, the lowest since May 6 on Tuesday, according to a Reuters report

Cryptocurrency trader Michaël van de Poppe said that the price action was “pretty decent” following Powell’s speech.

“Nothing really changed, but it looks like [dollar index] will have some further downwards momentum in which risk-on assets could have some relief,” said the analyst on Twitter.

On the movement of the apex coin, analysts are mixed in their outlook. Justin Bennett tweeted that Bitcoin is trying to “break out” and signals point to a relief rally. 

Chartist Ali Martinez called a market bottom between $22,380 and $15,110 on Tuesday based on logarithmic regression. 

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