The market was flooded green after the Fed pledged to continue buying bonds and China Evergrande has a debt settlement plan
The crypto market is showing signs of recovery after a 48-hour correction that resulted in Bitcoin and most altcoins continuously selling out. Stock and crypto investors are clearly concerned about the potential bankruptcy of Chinese real estate giant Evergrande, and many fear a default could trigger a global financial market downturn.
Those concerns were temporarily allayed after Evergrande reached an agreement with the bondholders and technically avoided a default. This helped spark a rebound in the crypto markets, bringing Bitcoin back to daily highs of $ 44,000.
Data from TradingView shows that Bitcoin price has rebounded 11.3% since hitting $ 39,572 on September 21, to an intraday high of $ 44,021, and is trading near $ 43,000 at the time of writing.
Bitcoin price chart 4 hours | Source: TradingView
Positive signal from the Fed
Bitcoin price soared after Federal Reserve Chairman Jerome Powell said the central bank plans to continue its $ 120 billion monthly asset purchase program through at least 2022.
Speaking to the press to better clarify the Fed’s announcement after a two-day meeting, Jerome Powell said the US Federal Reserve might start reducing its asset-buying program in November and end in mid-2022.
In the language of the announcement, the Fed no longer “promises” but said “will evaluate” in the coming meetings. This suggests that a formal announcement to reduce purchases of government bonds and mortgage-backed securities (MBS) could be made as early as the next Fed meeting in November. However, Powell remains open to the possibility that the Fed will postpone the start of “taper-reduce-QE” if necessary, and stresses that “taper” does not mean that the Fed will raise rates immediately.
In its announcement, the Fed was increasingly optimistic about the economic recovery. As a result, the US Federal Reserve signaled that it could reduce its support for the market if the economy grows as expected. On top of that, the Fed also said there was a high likelihood of a rate hike in 2022.
Meanwhile, Fed officials have agreed that they expect the pace of asset purchases to slow soon as the agency is still used to prop up the economy. The possibility of rate hikes in 2022 also marks the “turning point” for the Fed after a long period of low interest rates to help the business environment recover from the pandemic shock.
Cryptocurrency market fends off regulatory winds
Aside from developments related to Evergrande, recent comments by SEC chairman Gary Gensler are also weighing on the market, reaffirming his plans to crack down on cryptocurrencies, death and the growing stablecoin market.
However, the downside risk from Gary Gensler’s statements was erased yesterday as a rebound began to emerge following comments from the Fed, led by Bitcoin, as the price surged above the $ 44,000 support and Ethers rally to $ 3,000.
The impact of Evergrande and regulatory concerns on the market is reflected in the Crypto Fear & Greed Index. As Bitcoin magazine reported yesterday that after its neutrality last week and with extreme greed in August, the index recorded again extreme fear (21), currently the index has advanced to the fear zone of 27.
Cryptocurrency Fear and Greed Index | Source: alternative
The cryptocurrency market is full of green
Yesterday’s market fluctuations got most of the top 200 cryptocurrencies going, with the exception of stablecoins, as traders tried to get out and open new positions.
Cryptocurrency market performance | Source: Coin360
Enzyme (MLN), an Ethereum-based DeFi protocol that is the top winners at press time, is trading at $ 160.3 after gaining 32% in the past 24 hours. COTI is also up 21% and is trading at $ 0.385.
Other notable benefits include a 22% increase in Arweave (AR) and a 21% increase in the price of Perpetual Protocol (PERP).
The total crypto market cap is currently $ 1.947 billion and the dominance of Bitcoin is 42.1%.
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Mr. Teacher
According to Cointelegraph
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