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Bitcoin Surges as Fed Chair Powell Maintains Dovish Stance on Rates

Crypto markets experienced a significant rebound on Wednesday, with Bitcoin (BTC) surging towards $67,000 following remarks from U.S. Federal Reserve Chair Jerome Powell, who maintained a dovish tone despite hotter-than-expected inflation figures. BTC reached a daily high of $67,781, marking a more than 10% recovery from earlier levels. Ether (ETH) also bounced back, erasing a 6% dip triggered by news reports about the Ethereum Foundation facing a confidential inquiry and the U.S. Securities and Exchange Commission considering classifying the asset as a security.

Bitcoin Surges as Fed Chair Powell Maintains Dovish Stance on Rates

Dogecoin (DOGE), litecoin (LTC), and bitcoin cash (BCH) led gains among major cryptocurrencies after it was revealed that Coinbase planned to offer futures contracts on them, as posted on a U.S. regulator's website several weeks prior. The CoinDesk 20 Index (CD20) showed a nearly 3% increase over the past 24 hours.


Traditional markets mirrored the positive sentiment, with the S&P 500 index climbing nearly 1% to reach a new all-time high, while the Nasdaq-100 gained 1.3%. The U.S. dollar index (DXY) also dropped nearly 0.7% from its session high, indicating a heightened risk appetite among investors.


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Despite recent corrections in digital asset prices, especially with BTC experiencing its largest daily loss since November 2022, market participants turned optimistic ahead of the Federal Open Market Committee (FOMC) decision. Powell's remarks during the press conference suggested that the Fed remains committed to its dovish stance, with Powell stating, "We are making good progress on bringing inflation down," despite higher inflation readings.


Analysts like Fejau from Reflexivity Research noted, "Fed expects slightly higher inflation but not enough to derail their dovish inclination," indicating a positive outlook for the market.

Overall, the Fed's decision to maintain interest rates and rate cut plans steady alleviated concerns of a more hawkish scenario, which had previously weighed on asset prices. With Powell's reassurance, investors showed renewed confidence in both crypto and traditional markets.

By fLEXI tEAM

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