BTC headed towards the $35K level, resuming its uptrend ahead of the New York session as traders weighed their opportunities against the US President Joe Biden’s stimulus plan with a bearish impact on the US Dollar so let’s look into it some more in our Bitcoin news today.
The flagship cryptocurrency reclaimed the $34,500 level after rising to 6.83 percent and its market capitalization pushed past $636 billion but the move came after the slow Friday and weekend sessions where the price dropped to a new low of $28,372 at one point in time. Ethereum on the other hand exploded by more than 21 percent to claim the new record high of $1470. Other coins increased as well like Bitcoin Cash, Litecoin, Binance Coin all surging between 5-6% while the overall crypto market added $40 billion in the past 24hours.
“There is little doubt that the institutional flow impulse into bitcoin is what distinguishes 2020 from 2017. And there is no better metric to capture this institutional impulse than the flow trajectory of the Grayscale Bitcoin Trust in Figure 6.” ~ JPM pic.twitter.com/66ibPoTFEp
— Frank Chaparro (@fintechfrank) January 25, 2021
Bitcoin’s gained happened after Biden signed two executive orders that could increase spending on the federal food assistance program and to bring the new stimulus check. The US president plans to provide $1.9 trillion worth of relief funds in the fallout caused by the COVID pandemic. This mood lessened the demand for the safe-haven US dollar whose strength crashed by 0.2 percent against foreign currencies but the speculative short position on the dollar grew to the highest level in the week ending on January 19. This stressed that the market sentiment for the dollar is bearish and pushed the BTC anti-fiat narrative among speculators because of the negative correlation with one another once the COVID imposed a crash in March. Dan Tapiero said:
“Expect max fiscal and monetary stimulus until the current unemployment rate of 6.7 percent drops back to 4 percent—still a long way to go. Bitcoin and Gold supported.”
BTC headed towards a new high as signs of upsides appear after the FED meeting was announced. the US central bank chairman Jerome Powell expects to say that there are no plans to backtrack the FED’s open-ended bond purchase program and low-interest rates. MUFG currency analyst Lee Hardman said:
“The process of tapering QE is likely to be a gradual process which could last throughout 2022, and then be potentially followed by the first rate-hikes later in 2023. In these circumstances, we continue to believe that it is premature to expect the US dollar to rebound now in anticipation of policy tightening ahead, and still see scope for further weakness this year.”
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