Crypto Market Surges: PayPal Expands and Federal Reserve Holds Steady on Rates
Summary:
The cryptocurrency market experienced a significant rise today, with top-ranking coins Bitcoin and Ether contributing to the gains. Factors driving this positive trend include the Federal Reserve's dovish tone and PayPal's new partnership with crypto app MoonPay, which expands trading options for its users. Recent developments in U.S. bond yields also seem to have positively affected the crypto market. However, the article warns investors to conduct thorough research and weigh all risks given the unpredictable nature of the market.
Today, the digital currency market is on a rise, posting a 2.80% boost over the last day, lifting the total market value to $2.18 trillion as of May 3rd. This surge envelops growth from leading currencies such as Bitcoin (BTC) and Ether (ETH), whose values saw an increase of about 2.52% and 1.40% respectively in the same time span.
As per data from Coin360, the key factors contributing to the uptrend in the cryptocurrency space are the moderate approach of the Federal Reserve and the increased integration of PayPal into the cryptocurrency industry through a new collaboration.
Post the two-day Federal Open Market Committee (FOMC) meeting on May 1st, the Federal Reserve confirmed that it isn't planning any interest rate hike in the immediate future. This led to bond traders predicting the next rate cut to happen in November 2024, shifting from the initial estimation of July. This change coincided with a significant two-day upsurge in short-end Treasuries since January.
The yields on two-year notes, prone to interest rate alterations have dipped 331 basis points to 4.88% from their weekly peak on May 1st. Concurrently, the digital currency sphere has bounced back 7% since May 1st signifying a revival in risk-taking attitude amongst crypto traders bolstered by the declining yields of influential U.S. 10-Year Treasury notes.
The ongoing recovery of crypto coincides with the news of PayPal's partnership with MoonPay, a crypto app, that will empower the financial giant to extend over 110 cryptocurrencies trading options to its 426 million U.S. consumers.
When an established financial entity like PayPal expands its cryptocurrency services, it gives a nod of legitimacy to the crypto market for traditionally conservative investors and the general public. The news is driving today's cryptocurrency gains, as an uptick in demand and adoption is anticipated by traders and investors.
Earlier, PayPal facilitated transactions for Bitcoin, Ethereum, and its own U.S. dollar linked stable coin, PYUSD. The company recently divulged that PYUSD could be used for international transfers through its Xoom service.
The current crypto market gains are part of the consolidation trends commonly seen after Bitcoin halvings. Observers and investors are gearing up for a possible surge post the 2024 halving in line with historical trends.
The successful launch of Bitcoin exchange-traded funds (ETF) in the U.S. and Hong Kong have added to the bullish anticipations. On May 3rd, the crypto market presented a Hammer candlestick pattern, signalling bullish denial post-halving.
Based on various pointers implying bullish leanings in the market, today's crypto market surge can be attributed to the market cap rebounding from the bull flag's lower trendline. According to this technical rule, the market's next upturn target is around $3 trillion. Furthermore, the rebound's closeness to the market's multi-month ascending trendline support underlines the support level, asserting that the long-term bullish trend remains undisturbed. This article does not offer investment advice, Recommendations or guidance. All investments, trades carry risk. Readers should perform their independent research while making any decisions.
Published At
5/3/2024 1:00:23 PM
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