Bitcoin’s (BTC) recent surge is attracting attention, especially considering the market reaction to the Federal Reserve’s decision to keep interest rates stable and the release of the Nonfarm Payrolls (NFP) report.
Federal Reserves interest-rate decision and impact on crypto market
The Federal Open Market Committee (FOMC) of the U.S. Federal Reserve has decided to maintain the benchmark funds rate at a level of 5.25% and 5.50% as expected. While Fed Chairman Jerome Powell acknowledged the influence of rising U.S. Treasury yields on conditions he has left the possibility open for rate increases if deemed necessary.
Altcoins surged as BTC broke $35,500.
The cryptocurrency market celebrated when the Federal Reserve decided not to alter its interest rate on November 1. Altcoins like CAKE, UNI, and AAVE witnessed gains. While BTC remained strong at $35,400—a 1.7% increase in 24 hours—it also broke through the $35,000 mark that had previously acted as a resistance level for about two weeks.
Solana (SOL) continued its ascent by surging 16% within a day to reach its highest point in 14 months. This success was shared by tokens of layer 1 blockchains such as Avalanche (AVAX) Polkadot (DOT), and Near Protocol (NEAR) which experienced increases ranging from 6% to 10%.
DeFi tokens, which were experiencing a decline in October, have made a comeback. Uniswap (UNI) and Aave (AAVE) saw gains of 15% and 10% respectively. This resurgence indicates a renewed sense of confidence in the DeFi space.
BTC as a Defense against Monetary Policies
BTC‘s ability to withstand interest-rate policies can be partly attributed to its role as a hedge against monetary policies. With yields, BTC value proposition strengthens, making it an appealing investment option. If there are changes in rate policies, investors may become more inclined to buy and hold cryptocurrency.
MicroStrategy, a business intelligence and analytics software company, recently announced that they acquired 155 BTC in October. This brings their holdings to 6,607 since the beginning of Q3. They have purchased 158,400 bitcoins for $4.69 billion reaffirming their commitment to BTC.
Michael Saylor, the co-founder and Executive Chairman of MicroStrategy is optimistic about BTC‘s future. He believes that upcoming events like the bitcoin halving event in April 2024 will contribute to a price boost. Saylor predicts that this could lead to new price levels in financial history.
According to research conducted by Alliance Bernstein analysts, BTC price could potentially increase fivefold in the coming months, reaching $150,000. This optimism is based on factors such as the approval of a spot Bitcoin exchange-traded fund (ETF) and the anticipation surrounding the halving event.
Steven McClurg from Valkyrie Investments has an outlook on the approval of multiple spot Bitcoin ETF applications in November 2023. McClurg believes that firms have effectively addressed concerns related to market manipulation. This positive regulatory environment suggests prospects for cryptocurrency moving forward.
BTC Price amid NFP Report
Before the release of the Nonfarm Payrolls (NFP) report, BTC saw a correction reaching $34,200 from a high of $35,980. The NFP report, which indicated a then anticipated job growth rate, has the potential to influence decisions on interest rates by the U.S. Federal Reserve.
Key Price Levels to Watch
Currently, BTC is being traded at $34,700 with a trading volume of $19,512,333,150 in the 24 hours. The next resistance point for BTC is expected at around $35,000 where several buyers are holding 340,000 BTCs. If BTC manages to surpass this level, further noteworthy trading activity can be anticipated between $38,000 and $39,000 where 333,000 BTCs were acquired. In case of any correction in price levels, the buying activity seems to cluster above the $30k mark with approximately 553k BTCs changing hands.
Credit: Solomon Victor is a Technical Analyst who is also knowledgeable about various aspects of blockchain and cryptocurrency.