Bitcoin jumps on Fed announcement

BTC futures had been trading down around $55,000 after coming off the record high of $61,000 on Monday. Until Chairman Jerome Powell gave his statement followed with a round of Q and A solidified that the accommodative policy was here to stay. His reaffirmance of the Fed’s dovish stance took the U.S. dollar significantly lower and most other assets higher.

Bitcoin futures were still trading at $55,000 area until the Fed announcement was released at 2 PM EST. In the following hour, BTC jumped just over $2,000 along with gold and U.S. Equities. Gold gained roughly $20 and silver $0.50 in that same hour while the Nasdaq composite and S&P 500 came up close to their all-time highs. These gains were aided by the U.S. dollar falling from just below 92 down to 91.4, almost a half a percent decline in that single hour following the release of the Fed statement.

This does change the short-term outlook, although I believe we will still see lower pricing. However, the revised targets for traders shorting the market are $51,000 and $49,000. This is because the institutional investors were getting into BTC as a way to protect their purchasing power if the U.S. dollar continued to fall. The dollar not only fell today but the “dot plot” released by the Fed showing that most members were steadfast on keeping rates near zero for the rest of this year and next which is likely to cause a further decline in the dollar.

However, this does not mean that we were wrong in our assumption that we were involved in a final C Wave or that the corrective cycle has concluded.