Since August, the price of the digital currency hovered near the highest as investors took Federal Reserve Chair Jerome Powell's comments about progress on inflation as a sign that a less harsh monetary policy backdrop lies ahead.
The largest token rose by 2.4% before paring some of the gain to trade at $23,880 as of 5: 20 a.m. Thursday in London. Smaller tokens also advanced, including a 2.5% climb in Ether. In 2023, a metric of the top 100 coins is up 37%.
A range of investments from stocks to bonds andcryptocurrencies moved higher after Powell said that the disinflation process is underway. He didn't push back aggressively on a rally in global markets this year that loosened financial conditions, which can make it harder to temper price pressures.
Powell was speaking after the Fed had downshifted as predicted to a quarter-point interest rate hike. He said policy makers expect to deliver a couple of rate rises before putting their aggressive campaign on hold.
Cici Lu, founder of Venn Link Partners, said that thecurrencies are rallying on risk-on sentiment after dovish comments from the Fed overnight. She noted more purchases by institutional clients in the past few weeks.
Digital assets are rebounding from a steep loss last year, a period pockmarked by blowups like that of the FTX exchange.
Richard Galvin, co-founder of Digital Asset Capital Management, said that adoption, adoption and innovation are a much more positive picture than pricing and investor sentiment.
Galvin said that sector-specific drivers will exert more influence, despite the fact that he is unconvinced that cryptocurrencies will stay highly correlated with the macro landscape.
If inflation is a problem for digital assets, they are vulnerable to the possibility that borrowing costs must go higher for longer.
The levels around $25,000 have been highlighted by chart analysts as zones where the rally could be a little tastiest. An example of this is Mark Newton, head of technical strategy at Fundstrat, who flagged $25,200 as an area of potential resistance.
Virtual assets have a wind in their sails courtesy of dovish interpretations of Fed messaging. Avalanche, Aave, Polygon, and Binance Coin were among the best performers on Thursday.