Bitcoin surged back above $68,000 on Thursday, marking a nearly 4% increase within 24 hours, while ether also experienced a gain of 2%, settling around the $3,400 mark.
In a shift mirroring the rebound of stocks, both Bitcoin (BTC) and ether (ETH) recovered from earlier losses on Thursday. This resurgence coincided with efforts by the Federal Reserve to reassure traders about potential rate cuts anticipated later this year.
Bitcoin reclaimed the $68,000 threshold on Thursday, enjoying a robust rally of close to 4% following a lackluster start to the second quarter of 2024. Ether, in a similar vein, demonstrated a bounce-back, registering a gain of over 2% and trading just below $3,400 at the time of reporting, as per Coinbase data.
Alongside the crypto market upswing, the S&P 500 and Nasdaq Composite indices also reversed course on Thursday, climbing by 0.7% and 1.1% respectively. This positive momentum came in response to Federal Reserve Chairman Jerome Powell’s statements on Wednesday.
Powell reiterated the expectation of forthcoming rate reductions at “some point” before the conclusion of 2024. However, he acknowledged the challenges in navigating a volatile path toward lower inflation, particularly amidst unexpectedly favorable economic indicators such as Tuesday’s March ISM Manufacturing PMI, which surpassed 50 for the first time in 18 months.
Highlighting the Fed’s commitment to data-driven decision-making, Noelle Acheson, the author of the Crypto is Macro Now newsletter, noted that the central bank’s stance is now firmly “data-dependent.” This approach provides public reassurance that real-world observations carry more weight than theoretical models and grants the flexibility to adapt to evolving circumstances.
Nevertheless, Acheson cautioned that reliance on historical data may lead to delayed actions and disagreements over which metrics hold the most significance.
Looking ahead, market analysts are awaiting the release of the March employment report by the Bureau of Labor Statistics on Friday. Projections suggest that unemployment will remain steady at 3.9%, significantly below the historical average of approximately 5.7%. Should economic indicators signal an overly rapid acceleration, central bankers may opt to maintain rates, avoiding a premature return to rate hikes, analysts speculated.
