Key Points
- Bitcoin and Ethereum prices have risen, influenced by US economic policies aimed at restraining dollar strength.
- Analysts predict the value of Bitcoin and Ethereum will continue to be affected by the US economic climate.
Bitcoin and Ethereum have both seen an increase in value, with Bitcoin exceeding the $59,000 mark and Ethereum surpassing $3,000. The largest digital asset by market cap rose over 4.3% in the last 24 hours, trading at $59,233. Ethereum’s price also rose by 4% to $2,994 in the same period. The global cryptocurrency market cap today stands at $2.34 trillion, a 3.7% increase in the last 24 hours.
Impact of US Economic Policies
Analysts from QCP Capital suggest two US economic policy decisions could foster risk-on sentiment in the market, favoring assets like Bitcoin and Ethereum. They pointed to Federal Reserve Chair Powell’s post-rate decision speech, in which he announced the reduction of Quantitative Tightening (QT) from $60 billion monthly to $25 billion.
They also referenced the Quarterly Refund Announcement (QRA), where the Treasury stated it would maintain issuances for longer maturities, reducing concerns of a rise in long-term yields. These decisions could potentially weaken the dollar rally, which is positive for risk assets, possibly causing Bitcoin and Ethereum to increase in value.
Bitcoin’s Role in the Market
Analysts from Bitfinex highlighted Bitcoin’s ongoing role as the main price indicator for the crypto market and its crucial position as a leading indicator for the total market cap of the asset class. They observed a growing correlation between Bitcoin and traditional financial market indicators, especially as more financial institutions incorporate cryptocurrency into their portfolios. As a result, they expect the economic environment to significantly impact crypto asset values in the short term.
Despite the lack of immediate rate cuts following Wednesday’s FOMC meeting, the Bitfinex analysts remain confident in the current economic environment’s resilience. They forecast a period of consolidation for Bitcoin prices over the next one to two months, with trading expected to occur within a defined range while experiencing swings of up to $10,000 in either direction.
