First Mover: Bitcoin Price Gets Fed Boost, but Bond Yields Could Play Spoilsport: Analysts

March 18, 2021

Everything you need to make sense of the crypto markets and beyond

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By the CoinDesk Markets Team

Edited by Lawrence Lewitinn

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Bitcoin (BTC)

+6.3% $58,523

Ether (ETH)

+2.9% $1,817

(Price data as of Mar. 18 @11:00 UTC)

Good morning. Here's what we're writing about:

Check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Lawrence Lewitinn and Emily Parker, at 9 a.m. U.S. Eastern time. Today the show will feature guests:

Hester Peirce, commissioner at the U.S. Securities and Exchange Commission

MARKET MOVES by OMKAR GODBOLE

Bitcoin Price Gets Fed Boost, but Bond Yields Could Play Spoilsport: Analysts

Bitcoin’s bull run looks set to continue after the Federal Reserve reconfirmed its pro-stimulus stance this week.

“The narrative for bitcoin (BTC, +6.29%) as the preferred store of value has only strengthened in the wake of Powell’s comments,” Matthew Dibb, co-founder and COO of Stack Funds said. “Our outlook on BTC remains very bullish, recent retracement to $53,000 was a short-lived pull back before the cryptocurrency makes way to fresh all time highs.”

Fed Reserve Chair Jerome Powell pushed back against speculation of an early unwinding of monetary stimulus on Wednesday, boosting the appeal of inflation hedges such as bitcoin.

“The strong bulk of the committee is not showing a rate increase during this forecast period,” Powell said during a virtual press conference Wednesday following a meeting of the Federal Open Market Committee, according to Bloomberg. The central bank head added that it was “not yet” time to talk about reducing the central bank’s liquidity-boosting asset purchases.

Bitcoin picked up a bid near $55,500 following the Fed and rose nearly to $59,500 early today.

According to Denis Vinokourov, head of research at trading sentiment data provider Trade the Chain, further gains could be in the offing due to the Fed’s decision to raise the per counterparty limit in the overnight reverse repurchase operations from $30 billion to $80 billion.

“The hike implies that the Fed wants to keep overnight rates [short-term borrowing costs] low,” Vinokourov said. “Thus, its dollar-negative and in turn should spur on flow back into assets.”

Besides, with the Fed-related uncertainty out of the way, bitcoin and the broader crypto market may now see a “stimmies’ rally,” as tweeted by trader Alex Kruger. As per Mizuho Securities’ estimates, Americans may spend nearly $40 billion of the latest round of direct stimulus checks on bitcoin and stocks, boosting their prices.

Bitcoin’s daily chart is also painting a bullish picture.

Bitcoin daily chart (Source: TradingView)

Bitcoin jumped over 3% on Wednesday, confirming a bull revival signaled by Tuesday’s “hammer” candle and shifting focus to record highs above $61,000 reached on Saturday.

Yield worries persists

Bitcoin bulls will be keeping an eye on the U.S. bond market, as a faster rise in yields could weigh over equities, inviting selling pressure for bitcoin, too.

“A rise in yields is problematic period, but a speedy ascent can destabilize markets,” Kruger told CoinDesk in a Telegram chat.

Equities and bitcoin took a hit in the last week of February, with the latter falling by 20%, as the 10-year yield spiked to 12-month highs above 1.5%.

Similar downturns could be seen if the yield continues to rise. At press time, the 10-year is seen at a 14-month high of 1.72% versus 1.62% pre-Fed Reserve announcement and 1.52% a week ago. The Fed’s reassurance of continued stimulus support has so far failed to keep the benchmark yield from extending its recent rise.

However, pullbacks in bitcoin, if any, would be short-lived, according to LMAX Digital’s currency strategist. “As bitcoin matures into a full-fledged store of value asset, risk-off events will be bitcoin-supportive,” Kruger said in a Twitter response to this article’s author.

Bitcoin is currently changing hands near $58,450, up 6.3% over 24 hours, according to CoinDesk 20 data.

--Omkar Godbole

Read the original story here:

Bitcoin Price Gets Fed Boost, but Bond Yields Could Play Spoilsport: Analysts

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TECHNICIAN'S TAKE by DAMANICK DANTES

Bitcoin Rallies Towards $60K Resistance, Short-Term Support Seen at $56K

Bitcoin (BTC) buyers defended support around $54,000 yesterday, but the upside has stalled just shy of the $60,000 resistance level. The short-term trend is improving, which should keep traders active at lower support levels.

Hourly chart shows bitcoin holding support, albeit with an overbought RSI.

--Damanick Dantes

Original story found here:

Bitcoin Rallies Towards $60K Resistance, Short-Term Support Seen at $56K

BOLO

Be on the look out for these upcoming events:

BIGGEST MOVERS

These are the biggest movers in the CoinDesk 20 over the past 24 hours:

Notable Gainers:

0x (ZRX): +18.6%

Cardano (ADA): +17.0%

Notable Losers:

The CoinDesk 20 filters from the larger universe of thousands of cryptocurrencies and digital assets to define a core group of 20. These assets constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges.

ICYMI

In case you missed it, here is yesterday's episode of First Mover:

The US Bitcoin ETF Race Heats Up; Markets Await Fed Chair Powell’s Press Conference

More companies are filing for bitcoin ETFs and more types of bitcoin ETFs; we get the latest from Valkyrie's Steven McClurg. Also, a market check with analyst Michele Schneider ahead of Federal Reserve Chairman Jerome Powell's press conference today; Ernst & Young's Paul Brody weighs in. Are inflation fears and bitcoin's price too high?

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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.

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