- Bitcoin advanced before the New York opening bell, but struggled to keep its earnings above $ 9,000.
- The gains came as investors waited for Federal Reserve Chairman Jerome Powell to speak on upcoming monetary policy.
- Futures linked to the USA stock market indices They have increased in anticipation of negative interest rates.
Bitcoin rose, but leveled off near $ 9,000 as traders awaited the outcome of Federal Reserve President Jerome Powell's speech at 9:00 a.m. ET on Wednesday.
BTCUSD Closes Above $ 9,000 Before Powell's Speech
The benchmark cryptocurrency struck intraday at around $ 9,028 two hours before the New York opening bell. At its lowest point, it changed hands for $ 8,803. Price action in the range has shown that traders are pursuing a wait-and-see approach Powell offers more information on upcoming market trends.
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Negative interest rates
Investors predict the Fed chairman will hint at more stimulus measures, as well as the likelihood that the central bank will push interest rates below zero.
Traders, meanwhile, have bet in favor of a negative credit interest rate by the end of 2020. Confidence in the policy of historic rates has emerged after President Donald Trump tweeted in support.
"As long as other countries benefit from negative rates, the United States should also accept the" GIFT ". Big numbers." told me.
Speculation has led to a positive opening of derivatives in the US indices. The Dow Jones Industrial Average-linked futures rose 0.7%. At the same time, the Nasdaq Composite and the S&P 500 also suggested opening 0.72% and 0.56% more, respectively. Bitcoin is increasing under a similar influence.
Before Powell deepened the outlook for the market, other Fed officials have already warned of an uneven economic recovery amid the rapid spread of the coronavirus pandemic. While tech sectors can survive while people's dependence on online services increases during blockades, other sectors, such as airlines and hotels, could suffer considerably.
Loretta Mester, the chief Fed official in Cleveland, said the U.S. economy may need another stimulus package. Meanwhile, Democrats have launched an additional $ 3 trillion bill to tackle the crisis.
However, the bill would require additional approval from Republicans before reaching the Senate.
What's the next step for Bitcoin?
Emergency asset purchase programs and Federal Reserve stimulus packages helped Bitcoin recover from its settlement levels below $ 4,000 in March. A new wave of moderate fiscal policies could therefore be even more optimistic for the cryptocurrency in the long term.
Indeed, many Wall Street analysts and veterans view negative interest rates and large-scale asset purchases as inflationary. Bitcoin, on the other hand, has a defined supply limit of 21 million tokens. This makes it rarer than fiat.
"If you take money … you know that your central bank has a stated goal of depreciating its value by 2% per year," said billionaire hedge fund manager Paul Tudor Jones. "Bitcoin is not subject to the vagaries of public spending."
From a technical point of view, Bitcoin was looking to go down after testing $ 9,000 as temporary resistance.
Photo of Jungwoo Hong in Unsplash