Bitcoin Hovers Around $9,500 on Expectations of Fed Stimulus
Bitcoin (BTC) has once again crossed above $9,500 earlier today, with a slight increase in daily trading volume since the beginning of this week. Traders are now closely monitoring for a consolidation at $9,500 levels and break out above $9,775.
Maybe it is a false outbreak after extreme range bound movement since the beginning of June. Alternatively, investors could have turned bullish due to recent news that the Office of the Comptroller of the Currency (OCC) has permitted the US banks (federally chartered) to offer clients with cryptocurrency custodian services.
It is another positive initiative that will remove complexities in buying and holding cryptos, implying, cryptocurrency investors will be able to store their digital assets in the same bank where they have their savings and brokerage accounts.
The EU’s decision to spend €750 billion as stimulus to boost economy has raised expectations for another $1 trillion to $2 trillion stimulus package in the US. Market believes that a portion of funds given as stimulus will be used to purchase Bitcoin and it will spark a rally above $10,000.
With reference to the latest round of stimulus, Gemini cryptocurrency exchange co-founder and CEO Tyler Winklevoss stated that:
“The Fed continues to set the stage for Bitcoin’s bull run.”
In commodity markets, silver began the week with a strong rally, with the formation of a cup and handle pattern on daily time frame. The precious metal has gained 19.25% for the week.
Similarly, Gold also rallied to hit a high of $1,875. Since mid-March, gold had rallied 29%, fueled by Covid-19 related uncertainty. The S&P 500 and Dow also continued to rally for the past few days, supporting the argument that investors anticipate the US Fed and central banks across the globe to unveil additional stimulus measures.
As stated earlier, loose monetary policies are undoubtedly improving investor trust in the markets irrespective of the criticism made by analysts about its impact on the economy.
As Bitcoin has crossed above $9,500, investors are closely tracking the price movement with the hope that it will break above $9,775. Once that level gets breached, investors will be looking at $9,900-$10,000 level.
Altcoins also recorded decent gains as Bitcoin rallied at the beginning of the week. While Ether (ETH) gained almost 10%, XRP and Litecoin (LTC) gained 2.3% and 3.20%, respectively.
As perCoingecko, the market cap of cryptocurrency market now stands at $288.45 billion and Bitcoin’s dominance rate is at 60.6%.