Taiwan's central bank unexpectedly raises interest rates, altcoins overtake Bitcoin

Bitcoin (BTC) floated just below $41,000 for most of the U.S. trading session, while projects such as Avalanche and Solana were well on their way to the uptrend.

Price trend

Bitcoin (BTC) floated just below the $41,000 level for most of the U.S. trading session, while several major altcoins were in full swing.

The largest cryptocurrency by market capitalization, Bitcoin recently traded just below $41,000, about 24 hours ago, when it broke the $40,000 resistance barrier. The breakout, which came at the open in Asia, appeared to be tied to China's decision to back its real estate and technology sectors to reassure investors jittered by a regulatory crackdown and faltering economic growth. Asian markets continued to recover on Thursday.

Ether (ETH) changed hands around $2,800, up roughly 2% over the past 24 hours. Most of the other major cryptocurrencies posted gains over the same period, some rosy. Avalanche (AVAX) and Solana (SOL) tokens rose over 8% and 5% at one point. Bitcoin rallied for part of the day and ended up down about 1%.

The price of Bitcoin diverged from the performance of the stock market, which had a good day on the day, with the tech-heavy Nasdaq, Dow Jones Industrial Average and S&P 500 all gaining more than 1%. The above-mentioned gains came after strong gains in all three indices a day earlier.

"Bitcoin is struggling to follow stocks higher," Edward Moya, senior market analyst at Oanda Americas, said in an email.

Investors tend to believe that stories of Russians “rushing to the cryptocurrency market to evade sanctions and minimize their holdings of rubles” are exaggerated, Moya said. Chainalysis co-founder Jonathan Levin said the company "sees no evidence" of this trend.

The bad news from Ukraine continues, with civilian casualties in Russia's continued bombing of major cities. The U.S. House of Representatives voted overwhelmingly to halt normal trade relations with Russia, a day after U.S. President Joe Biden pledged to provide Ukraine with $800 million in military equipment and related support. Brent crashed back above $100, underscoring the concerns of the U.S. Federal Reserve, which raised interest rates by 25 basis points to curb rising inflation. The current US consumer price index of 7.9% is the highest since the 1980s.

Moya is optimistic about Bitcoin’s prospects, as long as investors remain willing to accept some level of risk. “The long-term outlook for Bitcoin remains positive and should be supported if risk appetite is not affected by any de-risking movement on Wall Street,” he said.

market insight

Taiwan's central bank surprised many analysts by announcing late Thursday that it would raise interest rates by 25 basis points.

That was unexpected to many, as 21 of 29 economists in a Bloomberg survey of economists forecast no change, while only two of 29 respondents forecast a 0.25% improvement.

All of this is based on Taiwan's forecast for GDP growth this year to continue at a historically strong 4.5%.

technical analysis

BTC continues to hover around the $40,000 level amid muted trading conditions. The cryptocurrency faces strong overhead resistance, which could stall the recent price gains. However, lower support at $35,000 and $37,000 could stabilize a retracement into the Asian session.

The Relative Strength Index (RSI) on the four-hour chart is approaching overbought levels, similar to what happened earlier this month before prices briefly pulled back. However, on the weekly chart, the RSI is rising from oversold levels, reducing the likelihood of a sharp sell-off in prices.

Typically, BTC consolidates for about two months after an extreme up or down trend. This means that the current trading range between $30,000 and $40,000 is likely to continue until a decisive breakout or breakdown comes. (CoinDesk)