Bitcoin surges above $18,000 for the first time since early November as the market gets ready for the last decision of the FED when it comes to interest rates. The market believes that there could be a pivoting point for the FED as inflation seems to have stabilized in the United States and all over the world.
Bitcoin Surges Above $18,000
Bitcoin (BTC), the largest cryptocurrency in the world, has surged above $18,000 for the first time in over a month after the recent inflation data shared by the United States. The inflation rate in the United States moved from 7.7% in October to 7.1% in November, as per the US Labour department.
This has pushed the U.S. dollar lower against other currencies, including Bitcoin. At the same time, the market is now expecting the FED to pivot as inflation rate has been better than expected. Therefore, this could be a good moment for risk assets, including digital currencies, that have been in a bear trend in the last year.
Other cryptocurrencies have also moved higher in recent days, including Ethereum (ETH), and OKB. However, other virtual currencies were not able to recover part of the price that they lost in recent days. While Bitcoin moved higher by 6% in the last 7 days, and Ethereum 5%, Binance Coin (BNB) lost 6.3% of its value, and Dogecoin (DOGE) registered almost 10% losses.
Therefore, Bitcoin is leading the market and it continues to move higher as it left the $16,000 price region behind. Now, the question is what will do the FED and how this could impact Bitcoin and other virtual currencies. Usually, when interest rates move lower, digital currencies should surge. This happens because low risk assets lose their attractiveness compared to other riskier alternatives.
It is also worth taking into consideration that traditional financial markets have also soared as they await the latest interest rate decision. The Dow Jones Industrial Average (DJIA) has gained 0.57% while the Nasdaq has moved higher 0.39% during the same period of time.
Today, Jerome Powell will give a speech about what the market could expect about possible interest rates hikes.
U.S. Bank Wealth Management’s Bill Northey said:
“This is one of the last major data points that we will see to define the 2022 capital markets. So investors will remain very focused on the new projection materials provided by the Federal reserve.”
This applies to multiple investors, including those in digital currencies and traditional financial markets. Bitcoin could be just starting a new short-term bull trend that could see the largest digital currency get closer to $20,000. At the time of writing this article, Bitcoin was being traded at over $18,300 and it had a market valuation of $348 billion. This shows that BTC had the necessary strength to move from close to $16,500 last week to its current price.