Within the last 24 hours, the market witnessed a significant rally in the Bitcoin price, which soared by 10% from a daily low of $60,805 to a peak of $68,250. This remarkable price movement can be attributed to several key factors, including yesterday’s Federal Open Market Committee (FOMC) meeting, a notable change in the Coinbase Premium, and Bitcoin’s technical breakout from a downtrend channel.
#1 FOMC Meeting: Dovish Remarks By Jerome Powell Fuel Optimism
As reported yesterday, the macro environment came back into focus for Bitcoin and crypto following the hotter than expected Consumer Price Index (CPI) and Producer Price Index (PPI) inflation data in the US. Investors seemed to have de-risked their positions prior to the FOMC event. However, investors got a favorable outcome.
The pivot point for Bitcoin’s rally can be traced back to the Federal Reserve’s latest FOMC meeting, where Chairman Jerome Powell delivered a speech that the market interpreted as dovish. The Fed’s stance, especially in light of recent inflation data, has reassured investors.
Crypto analyst Furkan Yildirim provided a summary of the FOMC’s key points: “The ‘Dot Plot’ projections show that the median official expects three quarter-percent cuts in 2024 […] The FOMC voted unanimously to leave the federal funds rate unchanged […] The median forecast for PCE inflation remains unchanged at 2.4% for 2024 […] Officials have also raised forecasts for where they see interest rates in the long term.”
The reaction to these announcements was immediately bullish in the traditional finance markets as well as Bitcoin and crypto. QCP Capital, a Singapore-based crypto asset trading firm, highlighted the dovish nature of the FOMC’s stance: “1. In Powell’s press conference speech, he was not concerned about the high inflation numbers in Jan and Feb. 2. In the dot plot, more members shifted their projection to 3 cuts in 2024 (9 members vs 6 in Dec).”
Analyst Ted (@tedtalksmacro) further emphasized the positive implications: “FOMC summary: – 3x rate cuts happening this year despite inflation remaining above 2% (Fed expects core PCE at 2.6%). Growth outlook upgraded. Send it.”
#2 Coinbase Premium Turns Green: A Sign Of Spot ETF Demand
The Coinbase Premium’s shift to positive territory can be identified as another critical factor influencing Bitcoin’s price movement. While yesterday’s ETF flows were negative again for the…
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