- Bitcoin reached a new yearly high above $35,500.
- Altcoins, led by Solana, had significant gains, outperforming Bitcoin.
- Bitcoin increased by 1.7% and surpassed the $35,000 resistance.
Bitcoin pushed to fresh yearly highs above $35,500 on Wednesday, while altcoins staged powerful rallies in the wake of the latest Federal Reserve decision on interest rates.
Led by a 12% surge in Solana, altcoins significantly outperformed bitcoin through the day’s trading. Bitcoin rose 3.4% but firmly exceeded the $35,000 resistance that had capped its price the past two weeks. Ether, the second-largest cryptocurrency, also falls behind bitcoin with nearly 3% gains.
Fed’s interest rate decision fueled the rally
The Fed’s widely expected decision to hold rates steady fueled investors to pile back into risky assets like crypto. Fed Chair Jerome Powell signaled rates may remain on hold but cautioned additional hikes are possible if needed.
Markets are now betting there is a 74% chance rates stay put at the January policy meeting. Crypto traders had feared the Fed would continue aggressively tightening into 2023.
Layer-1 tokens were among the biggest gainers as Solana extended its powerful rebound from this year’s lows. Polkadot, Avalanche, and Near Protocol’s native tokens all rallied. Decentralized finance tokens like Uniswap and Aave also surged.
The risk-on environment sent equities surging, with the S&P 500 up 1.1%. Meanwhile, yields on 10-year Treasuries pulled back sharply from near 5%, reflecting decreased expectations of further Fed hikes.
While the Fed’s moderating stance buoyed Bitcoin to a higher level, its underperformance versus altcoins shows investors piling into higher-upside plays. The crypto sector appears energized by the prospect of less restrictive Fed policy in 2023.