Fed Maintains Interest Rates, BTC and SOL Lead Crypto Market Surge

Bitcoin (BTC) and Solana (SOL) emerged as standout performers in the crypto market surge on November 2nd following the Federal Reserve's decision to keep interest rates unchanged.

Recent movements of leading cryptocurrencies in the past 24 hours, as captured by Coin360 screenshot at 08:15 AM on October 24, 2023

Following the November FOMC meeting, the Federal Reserve announced for the second consecutive time that it would maintain interest rates at 5.25-5.5%, the highest level since the 2008 financial crisis.

The Fed's data indicated that the U.S. economy grew in Q3/2023. Despite a slowdown in job growth, unemployment rates remained low, and inflation showed less volatility.

Federal Reserve Chairman Jerome Powell mentioned that recent increases in U.S. Treasury bond yields could impact financial markets, but he left open the possibility of further rate hikes.

The Fed plans another interest rate adjustment in mid-December, with many analysts predicting a start to rate cuts in 2024.

The cryptocurrency market responded positively to this news. Bitcoin (BTC), the world's largest cryptocurrency, regained momentum after trading sideways around $34,000 - $34,500 following the Fed's decision to hold rates steady.

As of November 2nd, Bitcoin (BTC) continued to climb to $35,650, marking a new peak for 2023 and the highest price in 1.5 years since May 2022, during the LUNA-UST crash.

1-hour chart of BTC/USDT pair on Binance at 08:15 AM on November 2, 2023

In October, BTC surged 28.5% driven by the prospect of Bitcoin ETFs from major Wall Street financial players.

Ethereum (ETH) also saw upward momentum, recovering to $1,857, though it has yet to surpass the $1,865 peak on October 26th.

4-hour chart of ETH/USDT pair on Binance at 08:15 AM on November 2, 2023

Among major altcoins, Solana (SOL) stood out with an 80% increase in October. From the evening of November 1st to November 2nd, SOL continued to rise to $46.9, its highest value since August 2022.

1-day chart of SOL/USDT pair on Binance at 08:15 AM on November 2, 2023

Solana's momentum primarily stemmed from the Solana Breakpoint 2023 conference held in Amsterdam, Netherlands, featuring announcements of new developments and fostering optimistic community sentiment. The Solana ecosystem faced significant impact during the FTX collapse in November 2022, with SOL prices plummeting from $33 to $8 in just 6 weeks.

Solana Breakpoint demonstrates that this blockchain still holds great potential and boasts a loyal developer and user community, now recovering from the FTX debacle.

Despite FTX's bankruptcy trustee being allowed to liquidate $3.4 billion in crypto over time, FTX holds $1.1 billion SOL (based on August 2023 prices), with a significant amount still locked and illiquid, as previously explained by Coin68.

However, blockchain data showed that FTX unstaked 1.6 million SOL on November 1st, valued at nearly $70 million, possibly preparing to sell this amount.

Spot On Chain data indicated that wallets associated with FTX transferred $21.6 million SOL and various other tokens to exchanges from late October, totaling $170 million.

Several other altcoins also maintained increases of 8-15% over the past 24 hours.

The liquidated derivative orders in the last 12 hours exceeded $100 million, with the majority involving BTC, ETH, and SOL. The short liquidation ratio was 58%, indicating balanced market sentiment between bulls and bears during this crypto market surge.

Crypto market long-short liquidation data at 08:15 AM on October 24, 2023. Image: Coinglass