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Crypto ‘altcoins’ lead push higher as Bitcoin jumps above $22,000

Crypto ‘altcoins’ lead push higher as Bitcoin jumps above $22,000
A reflection of a candlestick price chart and an illuminated Bitcoin logo inside a BitBase cryptocurrency exchange in Barcelona, Spain, on Monday, 16 May 2022. The wipeout of algorithmic stablecoin TerraUSD and its sister token Luna knocked more than $270 billion off the crypto sector’s total trillion-dollar value in the most volatile week for Bitcoin trading in at least two years. (Photo: Angel Garcia/Bloomberg)

A rally in cryptocurrencies on Tuesday took Bitcoin closer to breaking out of a one-month-old trading range and ignited big jumps in smaller tokens commonly referred to as altcoins.

The world’s largest virtual coin, Bitcoin climbed as much as 6.8% to the cusp of $23,000, a level it was last at in mid-June. Ether at one point added almost 11%. Solana also achieved a double-digit percentage gain.

Bitcoin has struggled to escape a $19,000 to $22,000 range as investors lick their wounds from a rout sparked by tightening monetary policy and exacerbated by the toppling of crypto lenders and the TerraUSD stablecoin. 

A sustained break above could renew the speculative momentum that can grip crypto assets in the blink of an eye. Expectations for Federal Reserve interest-rate hikes are less aggressive now, which may help.

“We’ve just seen that momentum change, and I think that momentum change is going to last for the second half of this year,” said Julian Hosp, co-founder of Cake Defi, a crypto wallet solution provider.

Ether is extending a rally that began last week after developers of the Ethereum blockchain gave a target for the long-anticipated software update that is projected to lower the network’s energy usage.

Altcoins often outperform Bitcoin during rallies and underperform when prices are falling, in part because they’re a favourite of more speculative traders and tend to be less liquid.

“Bitcoin has recaptured the $22,000 level as some short-sellers need to call it quits,” Edward Moya, senior market analyst at Oanda, wrote in a note. Cryptos are starting to look attractive now that expectations for Fed tightening have eased, he added.

The recent rebound in Bitcoin has pared its loss this year to about 52%. It was trading at $22,220 as of 10:27 a.m. in Tokyo. The overall market value of digital tokens has retaken the $1 trillion level. BM

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