Crypto Market Ignores Fed Tightening…Near Protocol Jumps 18%, Zcash Surges 17.5%

▲ Zcash (Zcash)/ChatGPT generated image ©

Despite the Fed's interest rate hike, the cryptocurrency market absorbed the shock quickly, rising by 1.2%. With Bitcoin (BTC) maintaining a relatively stable trend, some altcoins like Near Protocol (NEAR), Zcash (ZEC), and Dash (DASH) surged by double digits, leading to an analysis that market sentiment is shifting towards bullish.

According to investment media FXStreet on September 17 (local time), the cryptocurrency market rose by 1.2% over the past 24 hours. Volatility temporarily expanded immediately after the Fed's benchmark interest rate hike, but investors subsequently used the price drop as a buying opportunity. In particular, Near Protocol surged by 18%, Zcash by 17.5%, and Dash by 15%. In contrast, Filecoin (FIL) fell by 1%, Hedera (HBAR) dropped by 0.1%, and Tron (TRX) only rose by 0.1%. FxPro evaluated the rapid rise of some altcoins based on specific catalysts as a sign of fundamental changes in market sentiment.

However, investment sentiment indicators still showed a cautious mood. The cryptocurrency sentiment index slightly decreased from 51 to 50 the previous day. However, after staying mostly below 50 for about a year, the index has maintained above 50 for the past four weeks. Bitcoin also reacted limitedly to the Fed's interest rate decision. The media analyzed that unlike the relatively strong reaction in traditional financial markets, BTC showed an excessive negative reaction ahead of the failure of the US crypto market structure bill, the Clarity Act, and then showed relatively robust performance against other negative factors and a strong dollar.

Institutional demand continued to be a burden. US spot Bitcoin ETFs recorded outflows of over $450 million, the largest since June 25, following the failure of the Clarity Act's Senate vote. Bernstein predicted that after the Clarity Act vote failed, the roles of the US Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC) in cryptocurrency market regulation would increase, and the establishment of regulations related to native tokens, decentralized finance (DeFi), and tokenized stocks would also accelerate.

Profitability pressure emerged in the Bitcoin mining industry. According to CoinShares, the overall mining profitability of listed Bitcoin miners fell below the break-even point in the second quarter. While Bitcoin recorded $58,400 at the end of the quarter, the average cost to mine 1 BTC was approximately $75,500. Hashprice, a key indicator of miner profitability, also hit an all-time low in June. Amidst this, according to Lookonchain, Marathon Digital (MARA Holdings), the largest US miner, purchased an additional 1,292 BTC at an average of $76,300, increasing its holdings to 35,577 BTC.

Technology development is also continuing. The Bitcoin Core development team has entered the final testing phase for Bitcoin Core 32.0. This update changes the fee estimation method, speeds up block validation when reading data from disk, and fixes a walletnotify vulnerability. FxPro assessed that despite the Fed's tightening signals, the cryptocurrency market is rising, altcoins are leading the ascent, Bitcoin is maintaining a stable trend, and market sentiment remains above the neutral line.

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