U.S. stocks and the dollar fell as investors assessed the Federal Reserve’s views on the economy. Treasury bonds rebounded. The weakening of the dollar could thus boost the price of Bitcoin.
The Federal Reserve made some important announcements today
Following the Fed meeting that ended today, the U.S. central bank warned that the coronavirus pandemic still poses a considerable risk to the economy. A weakening of the dollar could be seen today.
According to its forecasts, U.S. GDP will plummet 6.5% this year to rise 5% in 2021 and 3.5% in 2022.
The unemployment rate will soar to 9.3% in 2020. In clear contrast to the figure of less than 4% with which the year began, and will fall to 6.5% in 2021 and 5.5% a year later. In other words, the Fed is not contemplating a return of the labor market to crisis-prone levels in the short term.
At the end of 2019, the Federal Reserve was contemplating 2% GDP growth in 2020 and a 3.5% unemployment rate, at historic lows and equivalent to full employment.
Inflation is estimated at 1% at the end of the year, compared to 1.9% six months ago, which is even further away from the 2% target that the Fed has been pursuing for some time. Inflation will be 1.5% in 2021 and 1.7% in 2022.
Weakening dollar could boost the price of Bitcoin
After all these events that took place earlier today we can say that, the weakening of the dollar could thus boost the price of Bitcoin.
If the dollar continues to fall as it did today, Bitcoin could conquer a price above USD 10,000.
Although the fluctuation of the dollar isn’t the only factor that makes Etoro move. If it’s a major catalyst around these moves.
Forex: The FED left the interest rate unchanged at >0.25%
Low Bitcoin price volatility reaches three months
The price of Bitcoin has remained relatively stable even after the third Bitcoin Halving. Yesterday was the third month since the start of the low-volatility phase of Bitcoin.
Bitcoin market traders expect the volatility of the main krypton currency to slow down now that the halving is behind us. The low volatility could be the result of some factors such as the tilt of this digital currency in the market. This has been pointed out by the analysis portal IntoTheBlock.
Historically, large price movements have occurred after halvings, not before. The event itself is bullish in longer time frames.
Therefore, expectations that Bitcoin would ’shoot up‘ in anticipation of the halving were wrong. In fact, the opposite happened, as too many expectations were placed on the event itself.