Cardano, Solana post double-digit gains as Bitcoin is back above $17k

Late Sunday, the value of Solana and Cardano spiked 21% and 17% respectively, moving in sync with Bitcoin that managed to reclaim the $17,000 price level despite the uncertainty surrounding Gemini and DCG.

A collection of gold coins hove above a human hand in a virtual space

The price of Bitcoin, the world’s first and largest cryptocurrency, is up more than 9% from its November 21 low of 15,768 and is currently changing hands at $17,238, as per data from TradingView. The recent price increase pushed BTC’s market cap to $332 billion, while its market dominance slid to 40% due to the intraday altcoin rally led by Cardano and Solana.

The promising start of a week comes as markets await the monthly CPI report from the US that is scheduled to be released on January 12. Jerome Powell, Chair of the Federal Reserve, is also expected to hold a press briefing Tuesday on inflation, rate hikes, and the labor market.

During the last policy meeting on December 13-14, Fed officials agreed to move to smaller rate increases, indicating that they may be ready to scale back to 25 basis points at the next Federal Reserve meeting scheduled for January 31-February 1. Should it be true, we can expect risk assets like crypto to rally, since interest rate easing drives investors’ appetite for risk.

Read also: Cardano launches its stablecoin Djed on the public testnet

"Most participants emphasized the need to retain flexibility and optionality when moving policy to a more restrictive stance," the minutes said. At the same time, the officials highlighted their commitment to bring inflation back to its 2% target.

"A number of participants emphasized that it would be important to clearly communicate that a slowing in the pace of rate increases was not an indication of any weakening of the Committee's resolve to achieve its price stability goal."

SOL, ADA set monthly highs

As Bitcoin spikes past $17k, altcoins shoot up in value, with the rally led by Solana and Cardano. APE, ATOM, DOGE, LTC, and MATIC also posted notable gains.

Crypto heatmap from
Image: COIN360

Solana, once Sam Bankman-Fried’s darling, suffered a spectacular fall from grace in the wake of FTX bankruptcy, seeing its price collapse more than 60% between November 6-9. However, its remarkable rebound over the first week of the year proves that the blockchain and its ecosystem aren’t dead yet, as many skeptics forecasted at the beginning of the FTX saga.

At the press time, SOL trades at $16.30, reaching territory absent from the chart since November 9. The recent rally comes as Solana devs launched a new dog-themed meme coin called BONK that was airdropped in late December to Solana contributors, artists, and NFT holders. According to data from CoinGecko, the meme token skyrocketed 343% the first week after its inception.

Meanwhile, Cardano saw its price surge to $0.33, a level not seen since November 19. While it's unclear what factors contributed to the rally, some point to the pending launch of Cardano’s Lace wallet and Charles Hoskinson’s recent announcement that his new clinic in Wyoming will start accepting ADA for payments.

Read also: Cardano Price Prediction 2023. Should I buy ADA?

DCG situation grows murkier

As Bitcoin hits levels not seen since mid-December and altcoins are well in the green, the unresolved situation around Barry Silbert’s Digital Currency Group continues to haunt the crypto market, holding back traders’ optimism.

Michaël van de Poppe, founder and CEO of trading firm Eight, believes that the current rally won’t last long, as CPI numbers or a black swan event stemming from FTX contagion may lead to a break from the upward direction.

For context, Barry Silbert’s crypto empire, Digital Currency Group, suffered major damage to its books after the FTX collapse left its subsidiary, crypto lender Genesis, with a $1.2 billion hole. In November, Genesis halted withdrawals and new loan originations, which was a massive blow to its institutional customers like Gemini exchange, which has about $900 million of its customers’ assets frozen on the platform.

Furthermore, Digital Currency Group is facing pending investigations from SEC and EDNY over its internal financial transactions. The US authorities are digging into money flows between DCG and Genesis, though there are no accusations of wrongdoing yet.

“DCG has a strong culture of integrity and has always conducted its business lawfully. We have no knowledge of or reason to believe that there is any Eastern District of New York investigation into DCG,” the company’s spokesperson said, quoted by Bloomberg.