Bitcoin Taps 5-Month Highs, Fed Hikes Rates as Expected, Optimism (OP) Leads DeFi Rally: This Week’s Recap

The past seven days saw the total cryptocurrency market capitalization increase by around $35 billion, and the industry continues to recover from the multitude of bankruptcies in 2022.

Some argue that the pace of the recovery is slowing down and that this might be the cause for another bearish reversal. Others are making a bullish case because they expect the US Federal Reserve to pivot in its monetary policy and to slow down in increasing interest rates. This is supported by this week’s FOMC meeting when the Fed hiked the rates with 25 basis points – exactly as many expected. This had a positive impact on the markets as a whole.

Bitcoin soared to a high above $24,000 for the first time since August 2022, while the rest of the market also rallied. There’s been a correction since, and at the time of this writing, BTC trades at around $23,500, charting an increase of 2.7% for the week.

That said, the increase in BTC’s dominance has been slowing down for the past couple of weeks, indicating that altcoins are starting to catch up. Some of the coins with larger capitalization, such as Fantom (FTM), are up 30% on the weekly. ATOM is up 15%, while Avalanche is up 17.4%.

The field of decentralized finance is also on the rise, with Ethereum layer-two scaling solution Optimism leading the charge. Its native cryptocurrency – OP – is up a whopping 45% in the past seven days alone, bringing its total gains to more than 230% for the month.

All in all, the predominant market sentiment has also improved tremendously in January. Presently, it stands at “greed” after being trapped in the “fear” and “extreme fear” zone for multiple months. It’s interesting to see whether the positive trend will continue in the following days.

Market Data

Market Cap: $1128B | 24H Vol: 133B | BTC Dominance: 40.4%

BTC: $23,636 (+2.7%) | ETH: $1,666 (+4%) | BNB: $332 (+9%)

MetaMask Unveils New Privacy Features for Crypto Wallets. One of the leading self-custodial cryptocurrency wallets, MetaMask, unveiled several privacy features. This came as a response to the increased criticism the company has been receiving in the past weeks.

Meta Lost $13.7B on Metaverse Initiative in 2022. Tech giant and social media mogul Meta (formerly: Facebook) lost a whopping $13.7 billion on its Metaverse initiative in 2022. Other tech giants also missed their earnings for the last quarter of 2022.

Optimism’s OP Token Clinches Record High Nearing $3 After New Bedrock Proposal. Optimism’s OP has been one of the best performers of the past week, recording an increase of around 40% in the past seven days alone. The cryptocurrency is up around 230% for the past month.

$110 Million Stolen From DeFi Protocols BonqDAO and AllianceBlock. This week wasn’t without its fair share of bad news as another group of DeFi protocols – BonqDAO and AllianceBlock were hacked for a considerable $110 million.

The UK to Enforce ‘Robust’ Standards in the Crypto Industry After FTX Crash. The United Kingdom is set to implement “robust, transparent, and fair standards” for the cryptocurrency industry in the country. The push for stringent regulations comes as a response to the FTX scandal.

How Bitcoin Reacted to January’s Highly Anticipated FOMC Meeting. The US Federal Reserve has hiked interest rates by 25 basis points. This was in line with the expectations and, as a consequence, markets rallied. Bitcoin followed suit and broke above $24K for the first time in five months.

Charts

This week we have a chart analysis of Ethereum, Ripple, Cardano, Polygon, and Fantom – click here for the complete price analysis.