Categories: Cryptocurrency

Bitcoin jumps back above $6.5k following US FED announcement

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Bitcoin prices have bounced back to resistance levels in the mid-$6K area following a recent U.S. Central Bank announcement with the proposal of an unprecedented fiscal stimulus package.

Since its plunge below US$4,000 [AU$6,700] last week, BTC has recovered almost 65% to current levels.

The same cannot be said, however, for traditional assets such as stocks, futures, and commodities, which continue to get battered as the coronavirus (COVID-19) spread hastens.

Bitcoin bounces back

A few hours ago, the world’s most popular digital asset surged back above $6k again to top out at an intraday high of $6,700 during morning trading in Asia on March 24, according to TradingView.

The move has resulted in an impressive 14% gain on the day for BTC, which is again outperforming all other traditional assets.

BTC price 1 hour chart – Tradingview.com

Bitcoin has now recovered over half of its losses since the big plunge a couple of weeks ago. Almost $20 billion has flooded back into crypto markets over the past 24 hours, and they appear to be one of the more resilient asset classes at the moment.

Other digital assets performing strongly following the FED announcement include Ethereum, BSV, Binance Coin, Tezos, Chainlink, and Monero.

Stock markets, however, continued to slide in Asia and the West on March 23, as lawmakers remained at odds over the details of the stimulus package.

Investors remain jittery while efforts by the world’s central banks to dump interest rates and pump newly minted money into economies are having little effect.

FED fiscal stimulus

The big Bitcoin move appears to have been driven by the Federal Reserve unveiling a sweeping series of unprecedented monetary measures to bolster the flailing economy.

According to Bloomberg, the U.S. Central Bank said that it will buy unlimited amounts of Treasury bonds and mortgage-backed securities to keep borrowing costs low.

The FED also set up programs to ensure credit flows to corporations, as well as state and local governments, though Democrats are still claiming that not enough is being done for average Americans.

The recent action has followed a number of extreme measures taken by the central bank over the previous months, which normally would have been unthinkable.

U.S. Treasury Secretary Steven Mnuchin told news outlets yesterday that it was not a slush fund, adding:

“It’s a mechanism we can use working with the Federal Reserve to provide another $4 trillion of liquidity into the market. That’s on top of the Fed’s balance sheet. This is a massive liquidity program.”

Quantitative easing, or injecting liquidity (a.k.a. printing money) is usually detrimental to a currency, as it reduces purchasing power.

Bitcoin, on the other hand, is immune from such practices, which makes it more bullish as recent market action has shown.

Martin Young

Martin has been writing on technology for 15 years, he has a keen eye for emerging cryptocurrency news, blockchain developments, and market sentiment.

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Martin Young

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