Reading time: ~2 m
Bitcoin has lost five percent daily growth following the completion of yesterday’s session. Investors and speculators were actively dumping digital currency after the speech of Jerome Powell, the head of the US Federal Reserve.
The US Department has decided on monetary policy in the coming year, designating the main task of fighting inflation, which has reached the level of 7%.
Powell has vowed to raise rates at every Fed meeting, but has kept rates in the 0-0.25% range for now, cutting back on the bond buyback (QE) program, which will completely disappear from the market in March. The rate provided cheap loans, and QE provided additional liquidity, the two main incentives for investment in risky assets.
The Fed’s plans deprive cryptocurrencies and stocks of the main drivers of growth, hinting at seven cycles of monetary tightening, to which markets will react with a fall each time. However, at the moment, the negative decisions of the financial authorities are already embedded in Bitcoin quotes.
In the coming days, before the end of the week, BTC has a chance to resume growth due to the proximity of options expiration. The execution of monthly contracts on the Deribit exchange, the main trading platform for crypto derivatives, is scheduled for January 28th.
In 80 percent of cases, Option Sellers at the time of expiration try to bring the Bitcoin price as close as possible to the Max Pain point in order to achieve minimum payouts to Contract Buyers. Now this level is at $42,000.
#Bitcoin #Lost #Daily #Growth #Fed #Meeting #Maintains #Potential #Return
