Yesterday, it was a great day for the crypto and US markets, given the performance of Bitcoin and S&P 500, which after the private FED meeting recorded excellent upward numbers.
The president of the US central bank Jerome Powell encouraged investors by confirming the prospect of interest rate cuts in the current year, even though inflation is slightly higher than expected.
Similarly, Ethereum also responded positively to the shakeout of the past few days, recovering the crucial price level of $3,500 after the SEC postponed its decision on the spot ETFs of funds Vaneck, ARK, Grayscale, Hashdex, and others.
All the details below.
Summary
Bitcoin performs well on the markets after the encouraging FED meeting in the US
Last week Bitcoin and all other crypto assets scared investors by undergoing a strong price correction after a crazy rally.
Today, however, spirits seem calmer given the words of Jerome Powell, president of the FED, who in the private meeting on Wednesday, March 20, used words of support for the short-term future of the US markets.
Despite the fact that slightly higher data than expected emerged from the latest survey on the country’s inflation (annual inflation 3.2% in February 2024 against expectations of 3.1%), Powell openly declares confidence that the United States will be able to contain the problem, confirming the plan for interest rate cuts planned for the current year.
Yesterday’s meeting ended with policymakers keeping the so-called “FED Funds rate” stable in the range of 525-550 basis points, but anticipating potential new cuts in June.
In particular, while in the month of May the chances of a cut remain very low, as early as June we could see the first reduction to 500-525 points, with consequent stimuli on the speculative markets in the US and surrounding areas.
Subsequently, between the “FOMC meetings” of July, September, November, and December, two more significant cuts are expected.
Bitcoin reacted very well to the accommodating words of the FED which supported its initial idea of switching to expansive monetary policies in the short term, capable of fueling the US financial markets machine.
The cryptocurrency grew by 9.5% yesterday, fully recovering from the dump of the previous day and opening the doors to a continuation of the bullish phase.
The long liquidations of the past week have not shifted investors’ bullish bias but have removed a good amount of leverage from the market, resetting the funding rate in futures markets and creating the conditions for a healthy trend.
Today it will be interesting to see how Bitcoin will react to the opening of the US markets with the spot ETFs ready to recover after 3 consecutive days of outflows that saw a loss of $250 million just yesterday.
BlackRock, Fidelity, and Ark funds could therefore see an extremely positive day after the FED’s confirmations, bringing Bitcoin back to the $70,000 mark and fueling financial operators’ euphoria once again.
Ethereum resumes $3,500 following SEC decision to postpone decision on spot ETFs
Yesterday, Ethereum also benefited from the latest FOMC of the FED, bouncing above the $3,500 level after the SEC had postponed the decision on the spot ETF in the US for the second cryptocurrency in the sector.
Gary Gensler, president of the US securities watchdog, had in fact expressed his concerns on Tuesday about the possibility of adding an exchange traded fund for ether, given the doubts about whether the asset should be classified as a security or not.
The postponement of the deadlines for the applications of VanEck, Grayscale, Ark, Hashdex and company had triggered panic among investors who were hoping for a positive breaking news and instead found themselves with the offer leading to a 10.3% crash in just one day of trading.
Yesterday, similar to Bitcoin, the crypto recovered the lost ground with the previous candle, regaining a fundamental value for the price action and bringing analysts’ mood to the stars.
Ethereum could now move sideways around the current prices, which indicate a value of $3,540, waiting for the SEC to make a final decision on the ETF issue in the US.
Most likely, the pressures from cryptocurrency companies like Coinbase and Grayscale will push the SEC to approve a second regulated instrument for crypto trading on Nasdaq or Dow Jones, but it will still take some time.
The Ethereum Foundation is currently facing a confidential investigation by the United States government, which, under the guidance of the SEC, considers the asset as an unregistered security. Until the issue is resolved, we will not see any ETH spot ETF.
The encouraging performances of Bitcoin and Ethereum are followed by those of other coins like DOGE, LTC, and BCH that have grown after the announcement of their introduction on Coinbase Derivatives for futures trading.
At the same time, traditional markets have also risen, driven by the expansive plans of the FED, with the S&P 500 index jumping by almost 1% reaching a new all-time high and the Nasdaq-100 recording a 1.3% increase.
The dollar index, on the other hand, has jumped negatively by 0.7%, indicating a phase of greater risk appetite among US investors.
