Investors were assessing the Federal Reserve’s decision to keep its pigeon policies stable, recovering their losses hours after Bitcoin prices dropped below the psychological support level of $ 30,000 in Wednesday’s New York session.
Monetary expansion continues
The head of the US central bank claimed that his office would keep reference interest rates close to zero while purchasing $ 120 billion a month of government and corporate bonds.
He stated that their expansion policies will remain intact until the US economy reaches maximum employment and inflation above 2 percent.
“The [coronavirus] outbreak still poses significant downside risks to the economy,” Powell said.
Following Mr Powell’s comments, Bitcoin climbed to its current high of $ 31,880 as it entered the early Asian session on Thursday. The leading cryptocurrency was trading at low volumes at around $ 31,500 at the time of this writing, indicating a short-term bias clash among traders in the market.
This is partly due to the strong US dollar. The dollar rose 0.53 percent to 90.64 against the highest foreign currency basket on Wednesday. Meanwhile, US stocks, the S&P 500, and the technology-focused Nasdaq Composite all lost 2.6 percent. Gold fell 0.23 percent.
Investors turned to government securities instead. The rise in the benchmark US 10-year Treasury bill pushed its yield below 1 percent for a short time Wednesday. It then settled at 1.01 percent. Traders in the Bitcoin market perceive low bond yields as a hint of increasing their offers on cryptocurrency.
Josh Rager, an independent market analyst and president of BlockRoots.com, focused on bitcoin’s technical prospects while remaining volatile around $ 30,000. Recalling the past price movements of the crypto currency, he stated that BTC / USD has a habit of entering long-term consolidation periods after parabolic movements. He emphasized that the current situation is not different.