Cryptocurrencies rise unabated; Bitcoin flirts with the $19,000 mark

The cryptocurrency market continues to rise and recovers the $900 billion market capitalization. Bitcoin (BTC) has risen almost 4% in the last 24 hours and stands at $18,820, as it aims for $19,000. Ethereum (ETH), meanwhile, has increased 0.8% and is trying to consolidate at $1,400, levels not seen since November 8, shortly before FTX's bankruptcy filing.

The good inflation data for December in the United States is mainly responsible for these significant rises in the market. The reigning cryptocurrency soared 5% on Thursday, its strongest intraday performance in two months, pushing it briefly above $19,000. "If we can take out that $19,000 level, then we're definitely on our way to $21,000," Julius de Kempenaer, senior technical analyst at StockCharts.com, told 'CoinDesk TV's 'All About Bitcoin' program.

The Consumer Price Index (CPI) in the world's leading economy fell six-tenths to 6.5%, while core inflation also fell appreciably, to 5.7% from 6% previously. For Naeem Aslam, chief market analyst at AvaTrade, US inflation "is in line with expectations." "Market players have been expecting the number to show a bit more improvement and this has made the bullish dollar bets to come back into the market. However, by any metric, this number is much better than the previous reading and inflation is moving in the right direction, which should keep some pressure off the Fed," he added.

Many analysts add that there is still a "real disconnect" between the Fed's stance and the expectations of much of the market and warn that it is too early to get excited about a turnaround by the central bank. This is the case of Morgan Stanley's chief investment officer, Mike Wilson, who pointed out that, "despite the fact that most institutional clients think we are probably going to enter a recession, they don't seem to be afraid of it".

The Federal Reserve has been clear: there will be no pause in interest rate hikes and interest rates will remain above 5% for some time. After President Jerome Powell's comments, the last to speak was the president of the Philadelphia Fed, Patrick Harker, who pointed out that the "appropriate" hikes for the current context should be 25 basis points for the central bank's monetary policy to be "sufficiently restrictive" by 2023.

Notably, according to CME's FedWatch tool, the consensus gives a 94.2% probability of a 0.25% hike in policy rates, currently in the 425-450 basis point range, at the Fed's February 1 conclave. The forecast is repeated for the March 22 meeting, with analysts believing there is a 73% chance of seeing a 25 basis point hike, although they see the chances of a pause in rate hikes by then increasing significantly.

Despite the good momentum in cryptos, doubts remain in the market. On Thursday, the Securities and Exchange Commission (SEC) alleged in a complaint that Gemini and Genesis sold unregistered securities, adding to the drama surrounding these two companies. For its part, Crypto.com will lay off 20% of its staff, while Sam Bankman-Fried, founder of FTX, again defended himself and assured that he did not steal funds from the platform's clients. In parallel, the liquidators of the bankrupt 'exchange' have already recovered more than $5 billion in cash and cryptoassets to settle their debt with creditors.

"We still have a couple of big shakeouts left in crypto, with some bankruptcy messes that have to be sorted and other firms still fighting to stay solvent.This will have a bigger impact on prices over the next couple of months," stated Michael Safai, analyst at Dexterity Capital.

In other market news, there have been generalized increases. Highlights include the 2.9% rise in Polygon (MATIC), 2.5% soar in polkadot (DOT) and 4.8% increase in Solana (SOL), which is close to $17 and surpasses Litecoin (LTC) as the eleventh cryptocurrency by total market capitalization. Cardano (ADA), Dogecoin (DOGE), Binance coin (BNB), Avalanche (AVAX) and Uniswap (UNI) have risen over 1%.