Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
A Jerome Powell speech on central bank digital currencies (CBDC) was enough to decouple Bitcoin from traditional asset markets.
The benchmark cryptocurrency surged above $11,800 in the hours leading up to the Federal Reserve chairmanâs cautious remarks on CBDCs at a panel organized by the International Monetary Fund. At 0900 ET Monday, BTC/USD underwent a speculative jump from $11,523 to $11,650. One hour later, when Mr. Powell started his speech, the pair rested.
The next hour, however, it resumed its short-term uptrend by adding another $150 to it. Around noon ET, Bitcoin had established an intraday high at $11,833.
It was a standalone act. None of the indexes that formed a positive correlation with Bitcoin matches its ascent in early Monday hours. The S&P 500, for instance, jumped 0.90 percent after the New York opening bell but later pared all those gains to close 1.63 percent lower.
Bitcoinâs daily candle, on the other hand, logged a 2.14 percent intraday return.
Xi Jinping Vibes
The uptick in BTC/USD on Monday served as a reminiscent of a short-term upward trend in October 2019. Only that time, traders raised their bids for the pair after Xi Jinping, Chinaâs premier, endorsed blockchain â Bitcoinâs underlying technology â in a public event.
BTC/USD climbed by more than 40 percent â from $7,430 to as much as $10,540 â before succumbing to a strong selling wave that followed later. The pair crashed by more than 39 percent when the China hype faded.
An imminent correction was a word of caution among many traders as they addressed the Bitcoin rallyâs size and pace. A pseudonymous one said that heâd be cautiously waiting for the crypto to hold above $11,660 before opening any new bullish positions.
âIf I lose [the support], [then] Iâll be looking to short down to 11.2k,â he added.
Ivan Liljeqvist, a Sweden-based market analyst, ran a poll to understand the consensus behind the next Bitcoin move. The results came mixed, with 47.7 percent voting in favor of correction towards $11,000.
Whatâs Next for Bitcoin
In the short-term, Bitcoin expects to retain its positive correlation with the US stock market. The cryptocurrencyâs direct relationship with the S&P 500 has been erratic, as shown in the Skew chart below. It rises and falls consecutively, but remain intact on a medium-term outlook.
The reason is that every market is waiting for the second coronavirus stimulus package. Once the negotiations settle â macro analysts expect a deal by the November 3 presidential election â all the riskier assets would likely surge in tandem.
Bitcoin also anticipates reaching a new yearly high as the stimulus reduces the bids for the US dollar â and even as it gives the Fed adequate tools to continue its near-zero lending rate and its infinite bond-buying program.
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.