Fed hikes rate by 50 bps, fuelling crypto rally

​​$BTC 24 Hour High $40,026  / Low $37,660 |   $BTC +5.0% Past 24 hours; +1.2% Past 7 day

Good morning. The Federal Reserve (Fed) yesterday announced to increase the interest rate by 50 bps, and reduced its asset portfolio by letting bond holdings mature instead of selling bonds outright to reinvest into new securities. $BTC and $ETH rallied on the news in tandem with equities as there were no surprise moves from the Fed, and the rate hike was in line with market expectations. Market sentiments are leaning towards bearishness, though the Fed’s actions on inflation manage to hold off a recession., and now has to hold off a recession. The market expects the interest rate to go up to 75 bps after the Fed’s next meeting. 

$BTC jumped over 5% over the past 24 hours after experiencing a short-term downtrend. It’s now trading at $39,600, with both the 0.5 Fibonacci retracement level and the $38,000 support level held. Based on April’s high of $48,000, the overall market sentiment towards the No. 1 digital asset remains relatively bearish. The 2022 trading range between $33,000 and $48,000 is still holding true, with prices trading at a +/-30% corridor for the better part of the year. As the major support levels are held, we are likely to see the market continue trading sideways in the near term. 

Besides, the crypto funds suffered the fourth straight week of net $120 million outflows last week. Nevertheless, the Fear & Greed Index is returned to the fear territory from yesterday’s extreme fear zone. With equities continuing to show strength, we expect them to lend support to the crypto markets in the short term, given digital assets’ correlation with equities remains tight.

Digital Assets Market

  • Total crypto market capitalization stands at $1.9T, +5.6% from yesterday
  • $BTC is +0.05% at time of writing; 24H liquidations and funding rates: 56.29M, +0.00875%% average
  • $ETH is +0.30% at time of writing; 24H liquidations and funding rates: 33.24M, +0.01093% average 
  • Stablecoins market dominance: USDT 44.49%; USDC 26.09%; UST 9.96%; BUSD 10.00%; DAI 4.38%

Alts and DeFi watch:

  • DeFi TVL: $205.53B (+0.62% over last 24 hours)
  • $SOL +8.6% in the last 24 hours, -5.2% in the past week
  • $SHIB +6.8% in the last 24 hours, -6.9% in the past week
  • $SAND +13.0% in the last 24 hours, -4.0% in the past week
  • $ENJ +10.4% in the last 24 hours, -9,3% in the past week

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OSL Trader View is contributed by Hans-Stefan Vonhaenisch & Ethan Fu.

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