In an important development for the cryptocurrency market, Bitcoin (BTC) reached a new peak for 2023 and approached the $ 40,000 milestone. At the time of writing, Bitcoin price is trading at $38,919, reflecting a 1.9% increase with an impressive market cap of $761 billion.
FED gave signal about interest rate increase
Federal Reserve Chairman Jerome Powell’s recent statement that there will be no interest rate increase in the future led to positive fluctuations in the cryptocurrency market. Powell’s statement came against the backdrop of strong economic data and slowing inflation in the US, providing a clear path for Bitcoin to rise above $40,000. According to a Matrixport report, analysts are optimistic, with some predicting a potential rally to $60,000 before the next Bitcoin halving in April 2024.
On-chain data provider Santiment reported that Bitcoin reacted strongly to Powell’s statement, reaching almost $39,000. The focus on Bitcoin rather than altcoins points to the prevailing sense of fear in the market, an element often associated with sustained price increases. Altcoin projects are, however, gaining momentum with the rise of BTC. In other words, the rise in Bitcoin price also indicates an increase in altcoins.
Investors are turning to Bitcoin
Amidst the current macroeconomic scenario, notable investors like Robert Kiyosaki are advising others to accumulate Bitcoin as a hedge against the impending recession in 2024. Some market analysts also predict that interest rates will be reduced in the first half of 2024. However, Powell warned against premature conclusions and speculation in his speech on Friday, stating that the Fed is ready to tighten policy further if necessary.
Bitcoin price experienced an increase in momentum
Despite the warnings, momentum for Bitcoin continues to increase. According to Glassnode data, more than 37,000 BTC worth $1.4 billion have been withdrawn from exchanges since November 17, indicating the trend of investors preferring to store their coins directly. This shift suggests that a long-term holding strategy is preferred, reflecting strong demand and decreasing sell-side pressure. Binance’s recent guilty plea may also be influencing this trend, coinciding with the anticipated launch of a spot exchange-traded fund (ETF) in the United States.
While Bitcoin’s momentum is increasing, FED President Chris Waller’s recent statements pointing to an economic slowdown further contribute to the positive mood towards Bitcoin. The cryptocurrency market remains dynamic as investors closely follow developments in the global economy and central bank policies.
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