Solana makes double-digit gains as Doge makes brief leap higher
After a week of whipsawing prices on macroeconomic concerns, Bitcoin has finished flat and certain altcoins have outperformed.
Federal Reserve chairman Jerome Powell announced plans to battle inflation on Wednesday, briefly pushing Bitcoin to $49K as global markets rallied. Yet the swing higher was short-lived, with prices falling again as investors continued to weigh the Federal Reserve’s plan and Europe’s top central bank announced similar action against inflation. Adding further to the uncertainty, reports emerged that Russia’s central bank is seeking to ban crypto.
Meanwhile, Ethereum beat Bitcoin by adding 3%, while Solana and Polygon celebrated double-digit gains and Dogecoin made a short-lived leap higher as Elon Musk tweeted that Tesla will accept it as payment for merch.
This Week’s Highlights
- Solana and Polygon make double-digit gains
- Bitcoin briefly bounces on Fed announcement
Solana and Polygon (MATIC) make double-digit gains
Driven by continued interest in non-fungible tokens (NFTs), smart contract platforms Solana and Polygon are the biggest winners of the week.
Solana beamed 13% higher as celebrities and politicians adopted the blockchain: Former First Lady Melania Trump announced her own NFT venture using Solana, basketball legend Michael Jordan revealed a fan engagement platform built on the blockchain, and Californian congressional candidate Shrina Kurani announced the issuance of 2,022 NFTs on Solana as part of her election campaign.
Pushing ahead, Polygon added 15% on the release of an instant token swaps feature, boosted further by news that the Uniswap community has voted to deploy the protocol on the Layer 2 platform.
Bitcoin briefly bounces on Fed announcement
In the highly-anticipated Federal Reserve announcement last Wednesday, Chairman Jerome Powell revealed plans to battle inflation by reducing bond purchases and hiking rates.
Reduction of stimulus is generally thought to be bearish for Bitcoin, which is often seen as a hedge against the dollar debasement and inflation created by loose monetary policies.
Nevertheless, Bitcoin was briefly boosted 5% by the news, suggesting traders were expecting faster removal of pandemic stimulus and more aggressive interest rate increases next year.
Week ahead
Although changes in the macro environment have dashed investors’ hopes for Santa to bring a crypto rally, data from Glassnode suggests the market could see a change of direction in the new year.
Glassnode researcher Dr. Johannes Hofmann tweeted on Friday that recent weeks have seen an “unprecedented amount of selling” from Asian traders, which could be due to exchanges removing banned Chinese users before the end of the year.
However, selling pressure has now abated and Western nations have been buying the dip — potentially meaning that the bull market could soon continue.