When Bitcoin (BTC-USD) traded close to $25,000 on September 11, it followed through with momentum to rally to $27,216. Sellers entered the trade when the Federal Reserve announced no interest rate increases in its policy meeting.
Pressure is mounting for cryptocurrency, led by BTC-USD, after the re-affirmed its continued interest rate levels. Interest income of at least 5% through next year increases the attractiveness of plain old fiat currency. The US dollar is relatively more appealing at current interest rates. Still, the looming U.S. government shutdown on Oct. 1, 2023, could undermine the market’s confidence in USD.
The upcoming political theatre sets the stage for Bitcoin resuming its uptrend from the $25,152.10 low set on Sep. 11. Crypto investors will want an above-average weighting on BTC-USD first. This hedges their exposure to U.S. treasury yields falling. For the last few weeks, short-term U.S. debt yields between 3 – 24 months rose. Each time, they would pull back.
The government continues to sell treasury in high volumes. This decreases the valuation of those debt instruments. The more yields pull back, the more it helps drive demand for Bitcoin as an alternative currency.
Watch BTC-USD closely. It leads the direction of cryptocurrency pricing.
