First Mover Asia: Taiwan's Surprising Interest Rate Hike; Altcoins Outdo Bitcoin

Prices: Bitcoin held steady above $40,000 as several altcoins surged.

Insights: Taiwan surprises with interest rate hike.

Technician's take: BTC's price range could persist, although there is less chance of another major sell-off.

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Bitcoin (BTC): $40,950 -0.3%

Ether (ETH): $2,815+2.2%

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Bitcoin holds steady as some altcoins surge

Bitcoin (BTC) floated just short of the $41,000 level for much of U.S. trading hours on a day in which several major alternative coins held starring roles.

The largest cryptocurrency by market capitalization was recently trading a little under $41,000, roughly where it stood 24 hours ago when it surged past the psychologically important $40,000 barrier. That climb came as Asian equities markets opened seemingly tied, initially, to China's decision to support its real estate and tech industries to calm investors grown skittish over a regulatory crackdown and faltering economic growth. Asian markets on Thursday continued to rally.

Ether (ETH) was changing hands at around $2,800, a roughly 2% gain over the past 24 hours. Most other major cryptos were in the green over the same period, some significantly so. The tokens for Avalanche (AVAX) and Solana (SOL)were up over 8% and 5% at one point. Bitcoin, which was up for parts of the day, had fallen about 1% amid light trading.

Bitcoin's price diverged from the performance of equities markets, which enjoyed a good day, with the tech-heavy Nasdaq, the Dow Jones Industrial Average and S&P 500 all rising over 1%. The increases followed strong gains a day earlier in all three indexes.

"Bitcoin is struggling to follow the move higher in stocks," said Oanda Americas Senior Market Analyst Edward Moya in an email.

Moya said investors were inclined to believe that stories of Russians "rushing to crypto markets to evade sanctions and minimize exposure to rubles were overdone." Chainalysis co-founder Jonathan Levin said the company had "not seen evidence" of such a trend.

Bad news continued to pour in from Ukraine, with continuing civilian and Russian military casualties amid Russia's ongoing bombardment of major cities. A day after U.S. President Joe Biden promised to provide $800 million in military equipment and related support to Ukraine, the U.S. House of Representatives voted overwhelmingly to halt normal trade relations with Russia. Prices of Brent crude oil roared back past $100, underlining the concerns of the U.S. Federal Reserve, which raised interest rates 25 basis points to curb rising inflation. The current 7.9% consumer price index in the U.S. is the highest since the 1980s.

Moya struck an optimistic note about bitcoin's prospects as long as investors remain willing to accept a degree of risk. "Bitcoin’s long-term outlook is still upbeat and should be supported if risk appetite is not subject to any de-risking movements on Wall Street," he said.

S&P 500: 4,411 +1.2%

DJIA: 34,480 +1.2%

Nasdaq: 13,614 +1.3%

Gold: $1,937 +0.5%

Taiwan's surprise interest rate hike

Taiwan’s central bank announced late Thursday, to the surprise of many analysts, that it would be raising interest rates by 0.25 percentage points.

This was a real wild card to many, because a survey of economists by Bloomberg had 21 out of 29 economists predicting no change, with the 0.25% raise only predicted by two of the 29 surveyed.

All this comes as Taiwan’s GDP growth is expected to continue to be historically strong, 4.5% forecasted for this year.

Taiwan’s surprise decision to raise rates likely comes as its central bank tries to avoid being labeled a currency manipulator by Washington, D.C., for undervaluing its currency to boost exports against its tech-heavy competitors including South Korea and China.

Ironically, Taiwan is more of a currency manipulator than China because of regular, undisclosed interventions in the foreign exchange market by the central bank to control the appreciation of its currency. If the Taiwan dollar were to weaken this next quarter as the U.S. raises rates, that might fuel the currency manipulator argument and attract unnecessary attention.

Bitcoin Testing Resistance Near $40K; Support at $35K-$37K

Bitcoin (BTC) continues to hover around the $40,000 price level amid choppy trading conditions. The cryptocurrency faces strong overhead resistance, which could stall the recent upswing in price. Still, lower support at $35,000 and $37,000 could stabilize pullbacks into the Asia trading day.

The relative strength index (RSI) on the four-hour chart is approaching overbought levels, similar to what occurred earlier this month, which preceded brief pullbacks in price. On the weekly chart, however, the RSI is rising from oversold levels, decreasing the likelihood of a significant price sell-off.

Typically, BTC consolidates for about two months following an extreme upswing or downtrend. That means the current trading range between $30,000 and $40,000 could persist until a decisive breakout or breakdown occurs.