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Even after the rate increases, Bitcoin increased by more than 3% to reclaim the $28,000 mark, and Ethereum, its biggest peer, increased by about 4% to reclaim the $1,800 level.
Bitcoin and other crypto tokens were selling higher on Friday even though the US Federal Reserve raised interest rates by an additional 25 basis points. The unrest in the financial industries sparked some interest in the market for digital tokens. Some well-known blue-chip coins were devoured by traders.
As the markets processed the US Fed rate hikes, Bitcoin increased by more than 3% to reclaim the $28,000 level. Ethereum, its biggest rival, gained about 4% and reclaimed the $1,800 mark. Altcoins beat the market leaders, increasing by up to 22%.
All other major crypto tokens were trading with respectable gains on Friday, with the exception of stablecoins pegged to the US dollar. Tron increased by more than 7%, Litecoin increased by 6%, Avalanche and Dogecoin both increased by 4%, and XRP, Polkadot, and Solana each increased by 3%.
With significant increases, the market capitalization of all cryptocurrencies was trading at $1.18 trillion, up more than 3% over the previous day. However, the total trading amount fell nearly 19%, or $55.11 billion, overall.
The interest rate hike revealed by the Fed at its most recent FOMC meeting sparked a strong reaction in the cryptocurrency market. According to Dhruvil Shah, SVP of Technology at Liminal, Bitcoin was ready to test the $30,000 mark but lost momentum after the Fed maintained its hawkish attitude to rein in soaring inflation.
Ethereum and other digital assets displayed a similar upward tendency, while Bitcoin recovered from the Fed shock today and is back above the $28,000 mark. We can anticipate limited market development due to high borrowing costs as the Fed may continue its gradual rate hike to manage the health of the economy.