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Crypto Market Highlights – DOGE Bucked a Powell-Fueled Rally

By:
Bob Mason
Published: Feb 2, 2023, 00:44 GMT+00:00

It was a bullish mid-week session for the crypto market, with the heavily anticipated Fed Chair Powell press conference driving demand for riskier assets.

Crypto Highlights - FX Empire

In this article:

Key Insights:

  • It was a mixed Wednesday session for the crypto top ten, with DOGE bucking a bullish trend.
  • Fed Chair Powell delivered a breakout session for the NASDAQ Index and the broader crypto market.
  • The crypto market cap rose by $25.84 billion to end the day at $1,031 billion.

It was a mixed session for the crypto top ten on Wednesday. SOL led the way while DOGE bucked a bullish trend. BTC held onto the $23,000 handle but failed to strike a new 2023 high.

Fed Chair Powell delivered a breakout session for the NASDAQ Index and the broader crypto market. While the Fed lifted rates by 25 basis points, in line with expectations, the Fed Chair Powell press conference drove demand for riskier assets and a slump in the dollar.

Powell stated that the Fed could deliver a few more rate hikes to bring inflation to target while acknowledging that the disinflationary process has started. The Fed Chair also said that the Fed Funds Rate could stay below 5% and deliver the inflation target without a ‘significant downturn, or a really significant increase in unemployment.’

In response, the NASDAQ Index rallied by 2.00%. This morning, the NASDAQ mini was up 121.5 points.

Today, US economic indicators will draw interest, with US jobless claims, unit labor costs, and factory and core durable goods orders in focus. Following Fed Chair Powell’s press conference, the labor market numbers will likely have more influence. However, investors will respond to dire factory or core durable goods order numbers.

Investors also need to monitor FTX and Genesis updates, with news from the SEC v Ripple case also requiring consideration. While easing contagion risk and Fed fear are bullish, regulatory uncertainty remains a headwind. Increased lawmaker and regulatory scrutiny could test buyer appetite.

NASDAQ correlation.
Total Market Cap – NASDAQ – 020223 Hourly Chart

Crypto Market Jumps on Fed Chair Powell Press Conference

It was a bullish Wednesday session. After a bearish morning, the crypto market cap fell to a pre-Powell low of $985.06 billion before surging to a late high of $1,037 billion. Despite a late pullback, the market cap ended the session at $1,031 billion, marking a $25.84 billion gain for the day.

Crypto market cap surges on Powell press conference.
Total Market Cap 020223 Daily Chart

The Crypto Market Movers and Shakers from the Top Ten and Beyond

It was a mixed session for the crypto top ten.

SOL rallied by 4.52% to lead the way, with BTC (+2.54%) and ETH (+3.57%) making solid gains.

However, ADA (+1.79%), BNB (+1.57%), and XRP (+1.86%) trailed the front runners, with DOGE falling by 1.87% to buck the broader market trend.

From the CoinMarketCap top 100, it was a bullish session.

Optimism (OP) rallied by 25.76% to lead the way, with arweave (AR) and synthetix (SNX) seeing gains of 20.56% and 15.58%, respectively.

However, UNUS SED LEO (LEO) also bucked the broader market trend, falling by 5.40% to join DOGE in the red.

24-Hour Liquidations Rise in Response to the Fed

Over 24 hours, crypto liquidations spiked in response to a late Fed-fueled breakout. Short positions had the higher share of liquidations, accounting for 62.21% of total liquidations. At the time of writing, 24-hour liquidations stood at $100.83 million versus $61.12 million on Wednesday morning.

Liquidated traders over the last 24 hours were also higher. At the time of writing, liquidated traders stood at 43,156 versus 23,306 on Wednesday morning. Crypto liquidations were higher over 12 and four hours while lower over one hour.

Crypto liquidations rise in response to the Fed.
Total Crypto Liquidations 020223

According to Coinglass, 12-hour liquidations stood at $83.56 million, up from $44.40 million on Wednesday, with four-hour liquidations rising from $24.21 million to $45.38 million. However, one-hour liquidations fell from $8.78 million to $1.62 million.

The chart below shows market conditions throughout the session.

Crypto market enjoys the Fed Effect.
Total Market Cap 020223 Hourly Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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