SOL, AVAX lead the recovery of crypto assets ─ BTC will test $46,000 | CoinDesk JAPAN

• Altcoins have outperformed Bitcoin and Ethereum, showing that investor interest is expanding beyond the biggest crypto assets.
• The US Federal Reserve is likely to keep interest rates unchanged. Some observers say the dovish move could have a positive impact on Bitcoin.

The market capitalization of crypto assets (virtual currency) jumped from $1.61 trillion (approximately 241 trillion yen, equivalent to 1 dollar = 150 yen) to $1.74 trillion (approximately 261 trillion yen) in one week, and Solana (SOL) Altcoins, such as Avalanche (AVAX) and Internet Computer (ICP), are at the forefront of the recovery.

SOL rose 27% to $103, recovering from losses seen after the spot Bitcoin exchange-traded fund (ETF) debuted in the U.S. on January 11, according to Velo Data. The rise comes amid a surge in user interest in Solana-based trading aggregator Jupiter, which reported $500 million in trading volume on January 29. ), surpassing Uniswap, the industry-leading decentralized exchange (DEX).

AVAX, the native token of Ethereum rival Avalanche, is up more than 25% in a week, while tokens like ICP, Near Protocol (NEAR), Polkadot (DOT), and Monero (XMR) are up 13% to 22%. Rose.

Bitcoin (BTC), the largest cryptocurrency by market cap, is up nearly 10% and trading above its 50-day simple moving average (SMA) of $42,870. A crossover above or below this level is said to be a signal of increasing bullish or bearish momentum.

Ethereum (ETH), the second-largest coin by market capitalization, is up only 0.6%. This poor performance appears to be due to market makers blocking price upside by trading against the direction of price movement.

“Altcoins’ consistent positive performance over the past six days creates optimism as Bitcoin tests $46,000,” FxPro senior market analyst Alex Kuptsikevich said in an email. We are preparing for it.” “The outperformance of major altcoins shows that market participants are interested in more than just the two biggest coins.”

Kapchikevich said that while it is important that Bitcoin has broken above its 50-day SMA, there is still no solid evidence of a bullish trend, and altcoins’ outperformance may not last long.

“We don’t expect sustained demand for small-cap altcoins or meme coins this year, which usually happens after a long bull market,” Kapchikevich said.

Performance of crypto assets since January 23rd. (Velo Data)

Focus on the Fed

The US Federal Reserve (FRB) will announce interest rates at 7:00 pm Coordinated Universal Time (UTC) on January 31st (4:00 am February 1st Japan time). Chairman Jerome Powell will hold a press conference 30 minutes later to explain the decision and policy direction.

The Fed is likely to keep its benchmark interest rate unchanged at 5.25% to 5.5%, with markets expecting the first rate cut to occur in May rather than March as previously expected.

The focus is on how quickly the Fed intends to end its so-called monetary tightening, a chain of 11 interest rate hikes that began in March 2022 and peaked in June 2022.

“Markets are sensitive to the Fed’s tone, and a dovish shift could increase risk appetite and increase inflows into Bitcoin and related ETFs,” Tagus Capital said. This is stated in the daily newsletter on the 30th.

｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: Shutterstock
｜Original text: SOL, AVAX Lead Crypto-Market Recovery, Bitcoin Tops 50-Day Average Before Fed Meeting