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Bitcoin rallied on Thursday after the Federal Reserve vowed to support the economic recovery in the United States.
The benchmark cryptocurrency jumped 3.80 percent to $58,083 after declining two days in a row. Meanwhile, its rivals across the crypto space, including the second-largest token Ethereum and its runner-up Binance Coin, also surged higher. Almost all alternative cryptocurrencies have a positive correlation with Bitcoin.
Dovish Fed
Traders started flocking into the cryptocurrency sector after minutes from the Federal Reserveās March meeting, released on Wednesday, which showed the central bank officials are optimistic about a sustained rebound in inflation. They committed to keep their easy monetary policies unchanged until employment recovers fully from the pandemic-led economic aftermath.
āThose big mental readjustments by the market contemplating the growth outlook and what that would mean for inflation have been fully digested,ā said April LaRusse, head of investment specialists at Insight Investment.
The US dollar index, which tracks the greenbackās strength against six major foreign currencies, was initially firm to the Fedās continued dovish stance. Nevertheless, it fell by 0.38 percent on Thursday, raising fears that the dollar might resume its downtrend after inching higher so far into 2021.
US dollar index turns lower after Fed commits loose monetary policies. Source: DXY on TradingView.com
Bitcoin, which does well when the dollar underperforms, rose inversely to the greenbackās performance in the previous 48 hours.Ā Tom Jessop, president of Fidelity Investmentsā digital assets wing, noted that the cryptocurrency has now matured as a global investment asset, which might continue to get better in coming years.
āI think we continue to see adoption at an accelerated pace for a host of reasons,ā he said at an event hosted by MarketWatch and Barronās this Wednesday.
Bitcoin Technical Outlook
The BTC/USD exchange rate showed possibilities of breaking bullish above $60,000.
Bitcoin eyes ascending channel breakout. Source: BTCUSD on TradingView.com
The pair trades inside an ascending triangle, which is technically a bullish continuation pattern in an uptrend. Its breakout target sits as high as the maximum distance between its upper and lower trendline. Therefore, if bitcoin breaks bullish above the Triangleās upper trendline resistance (around $60,000), it would target at least $70,000 as its next upside target.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.