#1 Pre-Conceived Notions for Bitcoin
The Federal Reserve chairman would likely speak in favor of the digital currencies for their ability to conduct global payment transfers speedily and cheaply. Quantum Economics’ founder, Mati Greenspan, that Mr. Powell’s outlook on cryptocurrencies would be vital to understand their future in the US regulatory space.Independent market analyst Scott Melker also tweeted that he will “definitely be paying attention,” possibly for any cues on how Mr. Powell’s words would impact Bitcoin, the leading cryptocurrency of all.
Traders may have interpreted the analysis as their sign of opening short-term upside positions in the Bitcoin market. On the other hand, the dollar’s decline fueled the intraday bullish sentiment.#2 China’s Growth
In the hours leading up to the panel meeting, BTC/USD has surged by 1.01 percent to circa $11,524. At the same time, the US dollar index, which pits the greenback against a set of leading foreign currencies, has dipped 0.52 percent to 93.27.
The US dollar experiences a sharp sell-off on Monday. Source:
“The DXY looks kind of weak,” tweeted Michaël van de Poppe, an independent market analyst. “[It] would suit BTC, in general.”Global reports see the US dollar weaker against the Chinese hedging instruments. The country today reported a 4.9 percent expansion in the third quarter of its economy. Analysts noted that China benefited from its early containment of the coronavirus pandemic, attracting investors looking for a safe-haven against the rising number of infections in the West.
“China is likely to be the sole major economy in the world to register positive growth this year,” Eswar Prasad, a China finance expert at Cornell University, .As a result, the dollar moved into the offshore markets and fell. Meanwhile, Bitcoin rose because of its inverse correlation with the greenback.
#3 Stimulus Hopes
The dollar also surged lower as before the November 3 presidential election to reach the second coronavirus stimulus deal.“The 48 only relates to if we want to get it done before the election, which we do,” Ms. Pelosi said. “We’re saying to them, we have to freeze the design on some of these things — are we going with it or not and what is the language? I’m optimistic because again we’ve been back and forth on all this.”That raised investors’ hopes to see more dollar liquidity in the market, thereby increasing their risk-on appetite in the near-term. With Mr. Powell further taking a stand in favor of more stimulus, investors may have anticipated that he would reiterate his opinions at the IMF panel meeting as well. It further explains why Bitcoin recovered during the mid-European and pre-New York trading sessions.