Surprisingly, the cryptocurrency market is experiencing a significant increase today, with Bitcoin currently worth an impressive $34628. The surge in value occurred after a critical moment in the financial industry, and the Federal Open Market Committee (FOMC) recently concluded its penultimate meeting this year, choosing to maintain a stable interest rate stance
Surprisingly, the cryptocurrency market is experiencing a significant increase today, with Bitcoin currently worth an impressive $34628. The surge in value occurred after a critical moment in the financial industry, and the Federal Open Market Committee (FOMC) recently concluded its penultimate meeting this year, choosing to maintain a stable interest rate stance.
The role of the Federal Reserve in the cryptocurrency market
Over the past year, the inflation rate in the United States has skyrocketed, reaching a staggering 9.1% in June 2022. In response to this issue, the Federal Reserve has taken a bold approach and implemented a series of interest rate hikes. These positive measures have successfully raised the federal funds rate to between 5.25% and 5.5%, the highest level since 2001. The fact has proven that this confident strategy is effective, and the inflation rate has slowed to a more manageable 3.7%.
Expectations for the next financial report
The next major event to occur in the financial market is the inflation report scheduled for November 14th by the US Bureau of Labor Statistics. As investors speculate about possible interest rate cuts, further declines in inflation may trigger a wave of risky asset investment in the upcoming FOMC decision. This situation may boost the stock and bond markets, leading to a decrease in bond yields and a flattening of the yield curve.
The connection between cryptocurrency and traditional markets
The cryptocurrency market is intricately linked to these broader financial movements, and Bitcoin is no exception. Its value is expected to reflect the trends of traditional markets.
ETF craze
JPMorgan Chase expects the first US Bitcoin spot ETF to be approved by January 10th, adding an additional layer of excitement to the cryptocurrency sector. The rumors surrounding BlackRock's ETF application have given Bitcoin a huge boost, driving its development. The value returned to the $35000 mark.
MicroStrategy's Success in Bitcoin
Business intelligence giant MicroStrategy is riding a wave of optimism, boasting that its large holdings of Bitcoin have achieved a book gain of $900 million. Since the third quarter, the company has been actively increasing its holdings of cryptocurrencies, accumulating 6067 Bitcoins, with an increase of 155 in October alone.
Bitcoin (BTC) Analysis
The price quickly climbed to the $36000 mark, but the pace of decline was also rapid. After such a rapid rise, it is not surprising that there has been a slight adjustment. However, the fact that a higher level of support reduces investors' concerns. When the market is in an upward trend, a decline is considered a buying opportunity, but it is important to determine the local bottom level before buying.
Michael Saylor, founder of MicroStrategy, stated that the current price may be an excellent entry opportunity for investors willing to wait for 12 to 48 months. The company's latest financial report shows that they have acquired an additional 155BTC.
In terms of Bitcoin prices, profit taking prevented the upward trend, reaching $35985, with prices struggling to maintain below $35000. If support is lost and the closing price falls below $33390, the price may fall back to $32611 and $31200.
Overall, in the upward trend, bulls strongly defend the 20 day moving average. If the level remains unchanged, it indicates that the trend is still positive. Bulls may make new attempts later, pushing the price up to $40000.
The Federal Reserve's swap pricing is expected to cut interest rates by 100 basis points next year, instead of 50 basis points. This is the result of today's price trend and Powell's relatively optimistic macro statements. As interest rates rise, they will decrease, forming the image of the Federal Reserve about to reverse from its peak period.
Ethereum (ETH) analysis
Although the ETH price briefly broke through the resistance level of $1865 a few days ago, it followed in the footsteps of Bitcoin and retreated. Short sellers may try to pull prices towards the support level of $1746. This may occur simultaneously with the support testing of BTC. For Ethereum, closing below the support level will indicate a return to a bearish trend.
If bulls can overcome the aforementioned resistance, they may test a psychological resistance level of $2000.
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