© Reuters
By Ambar Warrick
Investing.com-- Bitcoin hit a three-week high on Wednesday, while Ethereum reached its highest level since the merge as growing expectations of dovish signals from the Federal Reserve weakened the dollar.
rose 4.6% to $20,201, trading above the $20,000 level for the first time in three weeks, while jumped 10.7% to a 1-½ month high of $1,485 by 22:27 ET (02:27 GMT).
Gains in both tokens reflected a broader uptrend in the crypto market as the dollar retreated. Data from Coinmarketcap shows that total crypto market capitalization is less than $30 billion shy of reaching the $1 trillion mark.
Markets are pricing in expectations that a pronounced economic slowdown in the United States will spur the Fed into softening its hawkish stance. While the central bank is still widely expected to in November, traders are betting the bank will slow its pace of rate hikes the following month.
Data on Tuesday showed fell last month. The reading followed that showed an extended contraction in U.S. industrial activity in September.
The prospect of a less hawkish Fed weighed on the dollar, with the greenback falling for the last four sessions. Both the and were flat on Wednesday, trading at over two-week lows of 111.
Weakness in the dollar helped crypto markets break a tight trading range seen for over the past two months. But like previous breakouts, it remains to be seen if the market can sustain its uptrend.
Markets were also encouraged by reports that several wealthy Asian investors were buying into crypto, particularly Bitcoin.
The world’s largest cryptocurrency had last month risen as far as $22,700 before tumbling back to near-annual lows. The token and the broader crypto space suffered heavy losses this year as the Fed began tightening monetary policy.
Focus is also on regulatory updates to the crypto space, amid an ongoing clash with the Securities and Exchange Commission.
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