Bitcoin touches $30K, stocks dip ahead of Powell’s Capitol Hill appearance

Cryptocurrencies extended their rally Wednesday morning and equities took a dive into the red as investors kept an eye on Washington for signs of interest rate changes.

Bitcoin (BTC) rose another 5% Wednesday afternoon in New York, extending its gains and putting the crypto at more than 13% higher over the past 5 days. Bitcoin briefly surpasses $30,000 before dipping slightly lower. It was trading around $29,870 at time of publication.

Ether (ETH) similarly gained 3% Wednesday and is now up close to 8% since June 17.

Equities, on the other hand, erased modest gains seen over the past couple of trading days. The Nasdaq Composite and S&P 500 indexes posted losses of 0.7% and 0.5% Wednesday, respectively.

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Markets will be looking for signs that the Federal Reserve is either done or almost done hiking interest rates, founder of DataTrek Research Nicolas Colas said. Confirmation of this during Fed Chair Jerome Powell’s first day of Congressional testimony Wednesday should be enough to push stocks back into the green.

“The consensus view is that Fed Funds are at or very near their peak,” Colas said. “Markets have gotten this call wrong several times over the last year. Are they doing so again right now? We do not think so (and neither do many of our respondents), but this is certainly the right question to ask.”

Powell’s twice-annual testimony starts in the House Wednesday. The central bank head will move to the Senate Thursday.

In terms of crypto, there should be steam left in the rally, analysts say. Bitcoin soared above $29,000 Tuesday for the first time since May, surpassing a key resistance level analysts have been watching. The move could be related to apparent increased institutional interest as more traditional firms have moved to file for bitcoin spot ETF products and an international bank makes moves into the space.

“Banco Santander, the largest bank in Spain, the fourth largest in Europe and one of the largest in the world, tweeted about Bitcoin’s Lightning Network from its main handle,” Noelle Acheson, author of Crypto is Macro Now and former head of market insights at Genesis, said in a note Wednesday.

“It’s linking to an article in a series on digital assets on its website, but it’s notable that this promotion wasn’t siphoned off into a digital assets division.”

BlackRock proposed the launch of an iShares Bitcoin Trust Thursday. The firm’s decision to seek the launch of a spot bitcoin ETF could signal that BlackRock saw a window for approval.

“While crypto still needs more than favorable macroeconomic tailwinds and institutional inflows into Bitcoin, this is a welcoming development that reminds investors that crypto is here to stay,” analysts from Matrixport said in a Wednesday report.

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