Bitcoin & cryptocurrency news

Bitcoin, Ether Spike After Fed Announce No Change To Interest Rates

The price of major cryptocurrencies soared on Wednesday after the Federal Reserve announced that it will accelerate the tapering of its asset purchases, with the program set to expire in March, and that the benchmark interest rate would be raised three times next year. Following the Fed’s announcement, Bitcoin soared from roughly $47,800 to over $49,350. The cryptocurrency is currently worth $49,080, up 2.2 percent in the last 24 hours. Ethereum was at above $4k at press time. Tapering Scared Investors Off The crypto market may have already factored in the Fed’s decision to accelerate tapering. Bitcoin has lost more than a quarter of its value since hitting an all-time high of $68,991 in November. Ether has dropped more than 15% from its all-time high of $4,865.6. Major cryptocurrencies were likely to surge if the Fed was less aggressive than the market predicted, according to several traders. “We’ve been in a risk-off environment in bitcoin and the crypto asset broadly over the last month,” Louis LaValle, managing director at crypto fund manager 3iQ Digital Assets, said. “If the FOMC (Federal Open Market Committee) meeting doesn’t make blockbuster headlines, that could be a buying opportunity for those on the sidelines.” Powell stated in November that the Fed will “start to reduce the pace of asset purchases,” prompting many to believe that an interest rate hike would be announced at today’s meeting. President Biden recently re-nominated Federal Reserve Chair Jerome Powell for a second term Related article | New COVID Variant FUD Drives Bitcoin Down To $54k The reverse of Quantitative Easing programs, such as asset purchases and so-called “money printing” is known as tapering. Each month, the Fed buys $40 billion in US Agency Securities and $80 billion in US Treasury Securities. Stock prices have fallen as a result of the anxieties, as tapering tactics are known to trigger economic downturns. According to today’s Fed statement, the interest rate will continue around zero until complete employment recovery to pre-Covid levels is achieved. With new instances of the Omicron Covid variant reaching record highs in both the United States and the United Kingdom today, this is unlikely to happen anytime soon Bitcoin Spikes | Source: BTCUSD on Bitcoin Is Seen As Hedge But Volatility Threatens Many investors consider the largest cryptocurrency by market cap to be a hedge against inflation, owing to the belief that its supply is strictly limited by the programming embedded into the underlying blockchain. The Federal Reserve’s human-decided monetary policies, which have inflated its balance sheet to approximately $8.7 trillion, more than double where it was in early 2020, contrast with that hard-coded procedure. However, because bitcoin is seen as a hazardous asset, traders believe that loose monetary policies encourage investors to make larger speculative wagers. A shift away from these “dovish” policies could be a drag on bitcoin. It’s also unclear whether an unusually high number of Covid-19 cases will frighten financial markets, and if so, whether a Bitcoin bloodbath will follow suit, as it did in March 2020. Related article | Why Bitcoin Could Be Stronger Than Ever After COVID-19 Pandemic Passes Featured image from, charts from

Bitcoin & cryptocurrency news

FED’s Powell Doesn’t Think Crypto Risks Financial Stability

The crypto market cap has moved up to $2,2 trillion after the Fed announced they would double the tapering of bond purchase and interest rates will stay the same for now. Fed’s chairman Jerome Powell held a news conference after the decision was taken where he approached several issues on the United States economy and current concerns for its financial stability. Related Reading | Bitcoin, Ether Spike After Fed Announce No Change To Interest Rates When asked about the concerning risks and systemic issues that could affect the U.S. financial stability nowadays, Powell broke it down to four essential “pieces” that the Feds “hold” themselves to. In his words, that’s separated in the following keys: Asset valuations: “are somewhat elevated”, Powell says. Debt owed by businesses and households: “households are in very strong financial shape”, and “businesses actually have a lot of debt, but their default rates are very very low.” Funding risk: The fed sees “market funds as a vulnerability and would applaud the SEC’s action this week”, claims Powell. Leverage among financial institutions: “is low in the sense that capital is high.” Followingly, Powell named scenarios that they are looking at as possible risks, which start at the “emergence of a new [Covid] variant” and the concerning possibility –with no basis– that it could be resistant to vaccines. Similarly, they fear “a successful cyber attack” that could take down a major financial institution. The chairman says this is the one scenario they would not know how to deal with. Even though the reporter’s question had clearly meant to assess risks from the crypto industry, Powell did not even get close to mentioning it within his “list of horrible”, and when asked again to clarify if it is a concern to him, Powell responded: “I think the concerns there are not so much current financial stability concerns.” However, the chairman does see cryptocurrencies as “speculative assets” that are “risky” and “not backed by anything”, and he sees consumers issues for those who “may not understand what they’re getting”. Powell also thinks that certain events in the crypto market, like the kind of leverage built-in, should be followed, but that is not within the Feds jurisdiction, he reminded. Stablecoins Could Scale, Powell Thinks As Powell is currently not in favor of a crackdown on crypto similar to China’s to happen in the U.S., he does have considerations regarding other possible risks and agrees there should be certain regulations. He now expressed support to Biden’s working group report on stablecoins. Although, that report disappointed many as it failed to provide regulatory clarity and called for a new bill to “limit stablecoin issuance, and related activities of redemption and maintenance of reserve assets, to entities that are insured depository institutions.” The report puts all the weight on Congress and does see stablecoins as a possible systemic risk and wants to stop them from having “an excessive concentration of economic power”, a statement in which people saw the huge irony of the government not wanting such a strong competitor for the banking industry. In Powell’s views, “Stablecoins can certainly be a useful, efficient consumer-serving part of the financial system if they’re properly regulated,” and as there are no regulations at the moment he thinks “They have the potential to scale, particularly if they were to be associated with one of the very large tech networks that exist.” You could have a payment network that was immediately systemically important that didn’t have appropriate regulation and protections. The public relies on the government and the Fed in particular to make sure that the payment system is safe and reliable. As many can agree on the fact that certain regulations are needed to provide clarity, the report in question doesn’t paint the best picture. Powell’s statement, however, could be met halfways. Related Reading | CBDCs to coexist with cash payments, according to FED Chairman Powell

US Senator Says Defi Is the Most Dangerous Part of Crypto – Urges Regulators to Clamp Down Before It’s Too Late

US Senator Says Defi Is the Most Dangerous Part of Crypto – Urges Regulators to Clamp Down Before It's Too LateU.S. Senator Elizabeth Warren has called on regulators to clamp down on decentralized finance (defi) and stablecoins “before it’s too late.” She said: “Defi is the most dangerous part of the crypto world … it’s where the scammers, the cheats, and the swindlers mix among the part-time investors and first-time crypto traders.” US Senator Urges […]

Bitcoin & cryptocurrency news

TA: Bitcoin Spikes Higher, Why Bulls Could Aim Larger Increase To $52K

Bitcoin started an upside correction above the $48,000 resistance zone against the US Dollar. BTC could gain pace if there is a close above the $50,000 level. Bitcoin started a decent increase above the $47,500 and $48,000 levels. The price is now trading above $48,500 and the 100 hourly simple moving average. There was a break above a connecting bearish trend line with resistance near $48,200 on the hourly chart of the BTC/USD pair (data feed from Kraken). The pair could accelerate higher if there is a close above the $50,000 resistance zone. Bitcoin Price Starts Recovery Bitcoin price started a recovery wave above the $47,500 resistance zone. BTC bulls gained strength for a move above the $48,000 resistance zone. The upward move was such that the price broke the Fib retracement level of the recent decline from the $48,762 swing high to $46,666 low. Besides, there was a break above a connecting bearish trend line with resistance near $48,200 on the hourly chart of the BTC/USD pair. Bitcoin price is now trading above $48,500 and the 100 hourly simple moving average. It is testing the $49,250 resistance zone. It seems like the 1.236 Fib extension level of the recent decline from the $48,762 swing high to $46,666 low is acting as a resistance. Source: BTCUSD on The first major resistance is near the $49,500 level. The next key resistance could be $50,000. A proper break above the $50,000 resistance could open the doors for more upsides. The next key resistance is near the $51,200 level, above which the price may possibly rise towards $52,000. Dips Limited In BTC? If bitcoin fails to clear the $49,250 resistance zone, it could start a downside correction. An immediate support on the downside is near the $48,250 level and the 100 hourly SMA. The first major support is now forming near the $48,000 level. The main support is now near $47,500. A downside break below the $47,500 support may perhaps start a fresh decline in the near term. In the stated case, it could decline towards the $45,000 support zone. Technical indicators: Hourly MACD – The MACD is slowly losing pace in the bullish zone. Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently above the 50 level. Major Support Levels – $48,250, followed by $47,500. Major Resistance Levels – $49,250, $50,000 and $52,000.