Today, Bitcoin and most of the cryptocurrency market recovered the ground lost during the week, following a favorable reaction to announcements by the US Federal Reserve to keep interest rates unchanged.
The year-end policy is focused on promoting jobs and achieving price stability in the medium term. The Fed’s official P.R. highlighted the positive evolution of the economy, something that the financial – and cryptocurrency – markets received with optimism:
“With the progress of vaccinations and strong political support, economic activity and employment indicators have continued to strengthen … Overall financial conditions remain accommodative, partly reflecting policy measures aimed at supporting the economy and the flow of credit to American households and businesses. “
The Fed also announced its plans to fight inflation, ending its bond-buying program, and focusing on job generation.
Bitcoin Spikes But It’s Not Enough To Celebrate Yet
The news sparked mixed reactions among analysts, mostly based on the timeline used for their forecasts. In the very short term, it is a breath of fresh air for the markets because investors can borrow in times of crisis to continue their growth.
However, those thinking in the longer term cautiously pointed to the Fed’s prospects of rising interest rates at least three times in the coming year as part of a strategy to combat inflation – which is getting rid of its old label of “transitory.”
Bitcoin responded enthusiastically. The December 15 candlestick closed near $ 49,000, up 1.5% in 24 hours; however, that’s 5% more than the daily low of around $ 46,530. In other words, the Fed’s announcement played a role in driving Bitcoin’s price higher.
At the time of writing, Bitcoin is slightly under $49,000; however, prices are still below the 200 EMA located near $50K, which indicates that it is still too early to talk about a medium-term bullish recovery. Since the December 4 crash, Bitcoin has failed to break through the $50K barrier with strength and has remained relatively horizontal, moving between circa $46,500 and $50,000.
The Altcoin market follows Bitcoin
Most of the top 100 altcoins by market cap followed Bitcoin’s bullish movement, closing the day with green candles.
Avalanche (AVAX) leads with an 18% gain, according to Coinmarketcap. However, the unusual rise seems to have been more influenced by the launch of the USDC stablecoin on its blockchain.
Solana, on the other hand, also posted double-digit growth in what would be the biggest daily price increase since the start of the month.
In general, the markets are still not all that enthusiastic. The charts of the most important assets still give bearish signals, and the Crypto Fear & Greed Index shows a state of nervousness among digital currency hodlers.
It seems there is still a long way to go before the dream numbers described by yesterday’s Coinmarketcap issue come true.
