In a stunning display of growth, Bitcoin (BTC) has once again surpassed market predictions by breaking the $27,000 barrier. This exciting development comes in the wake of the Federal Reserve’s decision to maintain steady rates, shedding light on a unique correlation.
Stick around as we unpack this phenomenal rise and what it signifies for the cryptocurrency marketplace.
Previous Market Analysis
When Templeton filed for their Bitcoin ETF last week, Bitcoin’s price shot up +7.6% steadily over the next couple of days. Bitcoin rose further and is now sitting at $26,632 – a two-week high. However, in the following days, BTC rose even higher and broke the $27,000 mark.
Bitcoin still had to clear $28,142 in order to break the lower lows it had been forming on the daily timeframe.
Bitcoin Price Analysis
Bitcoin rose as high as $27,486, slightly above the 200-day EMA. However, the price got rejected and started coming off its high. The price of BTC currently sits at $26,656.
In the past month, BTC has tested the 200-day MA twice and got rejected twice. This is an indicator of weak bulls and may augur a bleak future for this global asset.
Additionally, many people are converting their cryptos to Bitcoin, as signaled by the increasing Bitcoin dominance. A rise in this indicator shows the market is fearful and hence, investors are hedging against a potential crash by converting their tokens to BTC. However, this move could be drastic for the market if market makers decide to crash Bitcoin’s price.
If BTC Dominance increases and Bitcoin’s price declines, the impact on other cryptocurrencies can be significantly more pronounced.
BTC dominance (BTC.D) currently stands at 50.15%. The all-time low BTC.D was in 2018 when it touched 37%. Coincidentally, 2018 was the peak of the bull market.
Meanwhile, after a two-day meeting, the Fed announced its federal funds rate would remain in a range of 5.25 to 5.5% – the same level that the central bank announced in July, when it last raised rates.
Economic Ninja on X thinks that although the pause in rate hike was expected this week, the Fed may have to resort to increasing the rates in the future as it tries to balance between a hard landing and a smooth transition. Ultimately the future can be one of two outcomes: Hyperinflation leading to global recession and an instant economic reset, or a controlled deflation leading to a prolonged period of economic recovery.
DISCLAIMER: The work included in this article is based on current events, technical charts, company news releases, and the author’s opinions. It may contain errors, and you shouldn’t make investment decisions based solely on what you read here.