Bitcoin price in slight recovery as Fed chair hints at delaying interest rate hike
Fed Chairman Jerome Powell has alluded to the possibility of the upcoming interest rate increase being stretched out over 2022.
- At press time, the total market capitalisation of the crypto market stands at AUD$2.91 trillion (US$2.1 trillion) with BTC's dominance rate hovering at 40.3%.
- Since the first week of November, more than 7.2 million BTC has exited various exchanges, indicating growing accumulation from long-term investors.
- Experts believe that for Bitcoin to resume on a bullish trajectory, the currency will have to break past its current price levels of AUD$59,500 cleanly.
After having scaled as low as AUD$55,000 (US$40,000) recently, Bitcoin, the world's largest cryptocurrency by total market capitalisation, has continued to muster support around the AUD$58,000 (US$42,000) resistance zone. As a result, the flagship crypto is exhibiting 24-hour gains of nearly 3% while trading at a price point of AUD$59,400.
Providing his take on Bitcoin's ongoing value action, independent market analyst Michaël van de Poppe noted that the asset is "stuck in a very narrow range" right now and for it to experience any sort of real breakout, it will have to surge past the AUD$59,500 (US$43k) mark. "Overall, we're facing support right now, which has to hold to avoid any market breakdowns," he opined.
After having dipped to a multi-month low of 10 out of 100 just a couple of days ago, the Crypto Fear and Greed Index, has made a recovery of sorts, currently hovering at 22 out of 100. It's still putting the market in the "extreme fear" zone.
Since hitting an all-time high of AUD$95,000 (US$69,000) on 8 November, investors have continued to accumulate Bitcoin, with approximately 7.27 million BTC having been transferred to various cold wallet addresses over the last couple of months.
Respite incoming for the crypto market?
Even though the Federal Open Market Committee (FOMC) recently noted that it could hike interest rates substantially — from its current near-zero levels — by the end of Q1 2021, chairman of the Federal Reserve Jerome Powell has indicated that the increase may be carried out in a more stretched out fashion, alluding to the possibility of a low-interest environment persisting for a longer period of time.
Analysts believe Powell's comments coupled with Bitcoin's technical data suggests that that the flagship crypto may have finally bottomed out, with pseudonymous crypto pundit ChrisBTCbull pointing to BTC's recent drawdown of around 40% as evidence of the same. Similarly, analyst Will Clemente III noted that the currency was "entering the Buy Zone on Dormancy Flow", suggesting that the future may finally hold some sort of respite for the market at large.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.