Radical change for cryptos; Bitcoin soars to over $24,000

There´s been a radical change in the cryptocurrency market. The market's main assets have soared in the last 24 hours, with Bitcoin (BTC) rising around 8% and standing at $24,700. Ethereum (ETH), meanwhile, soars 3.6% and stands at $1,660.

While the equity markets are bleeding from the crisis unleashed by the bankruptcy of Silicon Valley Bank (SVB), cryptos have been buoyant after falling as much or more than traditional stocks in the early stages of this turbulent event. According to some experts, this is because SVB's fall will completely change the Federal Reserve's (Fed) monetary policy plans. So much so, that prestigious firms such as Goldman Sachs predict that the central bank will not raise rates in March, while Nomura warns that the FOMC could decide on a 25 basis point cut next week.

"Now, in theory, the worst of the crisis should be behind us, as the US government guaranteed all depositors of the banks that collapsed last week. But the crisis will surely get the Fed to think twice about what to do at next week’s meeting," explained Ipek Ozkardeskaya, senior analyst at Swissquote Bank. The expert stressed that the pricing on Fed funds futures suggests that there is slightly more than 70% chance of a 25bp hike next month, and slightly less than 30% chance for no rate hike. "This is a big, big change since last week," he stated.

What could tip the balance one way or the other? The February CPI reading in the US. Both headline and core inflation are expected to have eased in February, but there is some market caution after last month's disappointment. "The base effect – where we will finally start comparing the war months to the war months won’t be in play until March – as Russia invaded Ukraine by end of February last year," noted Ozkardeskaya, who forecasts "a challenging CPI read for the US."

"An in-line, or ideally softer than expected, CPI data could fuel the expectation of "no hike" by the Fed, while a stronger than expected CPI data may not fuel the expectation of a rate hike by the Fed, as many investors will urge the Fed to hold off on raising interest rates and to be patient about the impact on inflation that could come with the delay," he concluded.

Cryptoassets reacted negatively to the latest CPI reading, although it didn't take long before the crisis unleashed by SVB turned the entire market upside down. According to Michael van de Pöppe, CEO and founder of investment firm Eight, the best thing for the cryptocurrency queen´s price would be to see some period of consolidation before the inflation data is released. He also noted that any lower-than-consensus-expected data will be "positive for Bitcoin, as we won't see rate hikes from Powell."

"Bitcoin is sweeping the highs here as it's testing range high at $25K. If markets sweep range high at $25.2K, make a bear. dive and fall back, I'd be looking for shorts to $23K," he added.

As for the rest of the altcoins market, there have been slightly more modest, but equally notable gains. Polygon (MATIC), Dogecoin (DOGE), Polkadot (DOT) and litecoin (LTC) soar around 2.5%. For their part, Cardan (ADA) and Solana (SOL) rise more than 1%, while Ripple (XRP) recovers what it lost yesterday, on Monday.