Bitcoin Retakes $35K After FOMC as Solana's SOL Leads Sharp Altcoin Rally

Led by solana's [SOL] 16% surge, altcoins rallied sharply throughout the session Wednesday, while a late move higher in bitcoin [BTC] pushed its price to a new 17-year high above $35,500.

Bitcoin at press time was changing hands at around $35,400, ahead 1.7% over the past 24 hours and firmly breaking above the $35,000 level which has capped its upward move over the last two weeks.

Solana [SOL] continued its remarkable rise, soaring 16% over the past 24 hours to a 14-month high. Native tokens of layer 1 blockchains such as Avalanche's [AVAX], Polkadot's [DOT] and Near Protocol's [NEAR] rose 6% to 10%.

Decentralized finance (DeFi) tokens – which were laggards during October – also popped, with uniswap [UNI] and aave [AAVE] advancing 15% and 10%, respectively.

Ether [ETH], the second largest crypto by market cap, was up nearly 2%, outperforming bitcoin by a few basis points.

The CoinDesk Market Index [CMI], a proxy for a broad basket of digital assets, was up 2% over the past 24 hours.

Checking the downside, SafeMoon's token [SFM] plummeted over 50% today as the Department of Justice (DOJ) arrested the project's executives for fraud and the U.S. Securities and Exchange Commission (SEC) filed unregistered security offering charges.

FOMC Meeting

The U.S. Federal Reserve's Federal Open Market Committee (FOMC) left its benchmark fed funds rate range steady at 5.25%-5.50% on Wednesday, which was widely anticipated.

Fed Chairman Jerome Powell said at the post-FOMC press conference that a run-up in U.S. Treasury yields have contributed to tightening financial conditions, but left the option open for an additional rate hike if necessary.

"Fed's likely done after back-to-back holds kept rates at a 22-year high," Edward Moya, market analyst at OANDA, noted in a newsletter. "The Fed did not rule out a rate increase in the coming months, but swap contracts showed traders weren't convinced."

Market participants now see 74% probability that the Fed will leave rates at the current level in January, up from 59%, and could start cutting at rates around mid-2024, according to the CME FedWatch Tool.

Equities concluded the day sharply higher, with the S&P 500 index up 1.1% and the tech-heavy Nasdaq 100 gaining 1.5%. 10-year U.S. Treasury yields buckled to 4.73%, down from near 5% earlier this week, pricing in the lower odds of further hikes.

"​​BTC is a hedge against loose monetary policies and so lower yields would strengthen that value proposition and investors' willingness to buy and hold crypto," Justin d'Anethan, head of business development at crypto market maker Keyrock, said in an email. "Should the hint of a change in rate policy become more pronounced, one would expect crypto markets to rise."