Solana Dominates Altcoin Surge as Bitcoin Reclaims $35K Post-FOMC

On Wednesday, the Federal Reserve's Federal Open Market Committee (FOMC) made no unexpected moves, maintaining its policy stance while emphasizing a continued commitment to tackling inflation.

Altcoins experienced a notable surge, led by Solana (SOL) which saw an impressive 16% increase in value. In tandem, Bitcoin (BTC) witnessed a late surge, propelling its price to a 17-year high, surpassing $35,500.

As of the latest update, Bitcoin was trading at approximately $35,400, marking a 1.7% increase in the past 24 hours. This surge firmly pushed Bitcoin beyond the $35,000 resistance level that had constrained its upward momentum over the past fortnight.

Solana (SOL) continued its remarkable ascent, soaring by 16% over the last 24 hours, reaching a peak not seen in 14 months. Native tokens of layer 1 blockchains, including Avalanche (AVAX), Polkadot (DOT), and Near Protocol (NEAR), also experienced notable gains ranging from 6% to 10%.

Tokens associated with decentralized finance (DeFi), which had lagged behind in October, made a significant comeback. Uniswap (UNI) and Aave (AAVE) saw impressive gains of 15% and 10% respectively.

Ether (ETH), the second-largest cryptocurrency by market capitalization, outperformed Bitcoin, registering nearly a 2% increase.

However, on the downside, SafeMoon's token (SFM) experienced a steep decline of over 50% as the Department of Justice (DOJ) apprehended the project's executives for fraud. Additionally, the U.S. Securities and Exchange Commission (SEC) filed charges for an unregistered security offering.

Federal Reserve's Policy Committee Convenes: FOMC Gathering

During the post-FOMC press conference, Fed Chairman Jerome Powell acknowledged that the surge in U.S. Treasury yields had contributed to a tightening of financial conditions. He also indicated that the option for an additional rate hike remained open if deemed necessary.

Edward Moya, a market analyst at OANDA, noted in a newsletter, 

"The Fed is likely done after keeping rates steady at a 22-year high for two consecutive sessions. While the Fed did not rule out a rate increase in the coming months, swap contracts suggested that traders were not entirely convinced."

According to the CME FedWatch Tool, market participants now perceive a 74% likelihood that the Fed will maintain rates at their current level in January, an increase from the previous estimate of 59%. The possibility of rate cuts beginning around mid-2024 is also being considered.

Equities closed the day on a strong note, with the S&P 500 index rising by 1.1% and the technology-heavy Nasdaq 100 gaining 1.5%. Meanwhile, 10-year U.S. Treasury yields retreated to 4.73%, down from nearly 5% earlier in the week, reflecting reduced expectations of further hikes.

Justin d'Anethan, Head of Business Development at crypto market maker Keyrock, highlighted, 

"BTC serves as a hedge against loose monetary policies, so lower yields would reinforce this value proposition and enhance investors' willingness to acquire and hold cryptocurrencies. If there are more pronounced signals of a shift in rate policy, one would expect crypto markets to respond positively."

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