Bitcoin inches toward $20,000 and ether ticks higher amid hopes hiking may slow

Quick Take

  • Bitcoin was trading at $19,929 on Tuesday, while ether was at $1,350.
  • Broader financial markets were boosted overnight by what was considered a dovish rate decision by Australia’s central bank.

Bitcoin and ether were trading higher on Tuesday morning ET, as financial markets perked up following a smaller-than-expected rate hike in Australia. 

The Reserve Bank of Australia (RBA) decided to increase interest rates by just 25 basis points this week, becoming the first major central bank to break the mould. The status quo around rate hikes could be under threat going forward, as the United Nations urged rich nations to temper restrictive rises on Monday.

U.S. stock futures rose on Tuesday, with S&P 500 futures up over 1.5% and Nasdaq 100 futures up almost 1.9%. Cryptocurrencies climbed with them, with bitcoin testing levels around $20,000.

Bitcoin was trading up 3.7% at $19,929 over the past 24 hours, according to Coinbase data. The leading cryptocurrency by market cap registered modest gains last week as it briefly appeared to decouple from movements in equities, which it had begun to track closely through the end of the summer and into September — the bitcoin Pearson correlation is now at its lowest point since June, according to The Block's data dashboard. 

Ether was also trading higher on Tuesday, up nearly 4% at $1,350, according to data from Coinbase. Ethereum's native token had traded down through the end of September, with many commentators noting the token experienced a "buy-the-rumor, sell-the-news" moment following The Merge.

Despite crypto showing signs of breaking with traditional markets, Tuesday's increase appears to be largely in line with equities and tracks a weakening dollar — which FTX's Sam Bankman-Fried previously noted as a contributing factor in lower bitcoin prices. 

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