Fed decision revives Bitcoin and cryptocurrency market
The price of Bitcoin has risen to more than $ 49,000 USD, while Etherem and other cryptocurrencies are also increasing.
Market Movements: Bitcoin price surpasses $ 49,000 USD after the US Fed’s decision to accelerate the withdrawal of stimulus measures.
Technical aspect: Bitcoin price dynamics stabilize after several weeks of low trading volume.
Bitcoin (BTC): $ 48,843 USD + 1.3%
Ethereum (ETH): $ 4,014 USD + 4.5%
S&P 500: 4709 + 1.6%
Dow Jones: 35.927 + 1.1%
Nasdaq: 15,565 + 2.1%
Or: $ 1777 USD + 0.2%
The market is moving
Bitcoin, the number one cryptocurrency by market capitalization, rose above $ 49,000 on Wednesday, after officials at the U.S. Federal Reserve approved the acceleration of the central bank’s plan to withdraw stimulus efforts from the coronavirus pandemic.
Following the news, cryptocurrency and the traditional market surged as the central bank’s decision eased investor uncertainty. Fed bankers have indicated that they are prepared to raise the short-term interest rate at least three times next year to cope with the current high inflation.
The entire cryptocurrency market was closely watching the Fed move as many believe that tightening monetary policy is generally viewed as bearish for risky assets, including cryptocurrencies. The prices of Bitcoin and other cryptocurrencies have fallen sharply in recent weeks as investors were concerned about the aggressive adjustment of Fed policy. The price hike after Wednesday’s news showed “a rebound of relief”, as CoinDesk reported.
Bitcoin (BTC) trading volume on major centralized exchanges was slightly higher on Wednesday than it was a day ago. The prices of other major cryptocurrencies have also risen. Ethereum (ETH) surged above $ 4,000 after falling below $ 3,700 earlier this week.
Source: CoinDesk / CryptoComparer
Technical point of view
Bitcoin’s four-hour price chart showing support and resistance levels.
Source: Damanick Dantes / CoinDesk, TradingView
Bitcoin (BTC) was holding support at around $ 46,000 USD and is attempting to reverse a short-term downtrend. Still, the upside appears to be capped at the resistance level at $ 52,000 USD, which is roughly in the middle of the 20% sell-off that occurred earlier this month.
The Relative Strength Index (RSI) on the daily chart is the most oversold since May 20, which preceded a sharp rally in prices. Momentum is also stabilizing after several weeks of low trading volume.
On the weekly chart, price conditions are less favorable as the uptrend appears to be slowing down. For now, this suggests that short-term buyers may struggle beyond $ 50,000 to $ 55,000 USD.
The opinions expressed here are solely those of the author and do not necessarily reflect the views of Forex Quebec. Every investment and business move carries risk, you need to do your own research when making a decision.
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