Bitcoin (BTC-USD) fell below $40,900 last week before trying to return to $43,000. Central Bank efforts to slow inflation through interest rate policies had an impact on BTC prices.
Last week, the Federal Reserve insinuated a rate cut through its dot plot. Although it suggests at least three interest rate cuts, the Fed left rates unchanged. The outlook for lower rates hurt the U.S. dollar. Gold prices fell to around $1,980 before rebounding back to $2030. This should have lifted Bitcoin prices, too.
What happened?
A $300 million long liquidation across the cryptocurrency hurt BTC-USD prices on Dec. 11. This drop may turn out to be a blip. In the medium term, BTC uptrends suggest the next resistance level is $44,000. Patient Bitcoin holders may wait until March 2024 when chances of interest rate cuts increase. Lower rates reduce the attractiveness of the U.S. Treasury and the dollar.
When the fiat falls, Bitcoin’s value increases.
Regulatory tailwinds are also bullish for Bitcoin. The SEC lost its case to stop exchange-traded funds mirroring spot Bitcoin prices. This would invite more investors to buy BTC through ETFs, increasing demand.
Bitcoin remains the best among the cryptocurrencies to hold. Ethereum (ETH) is the second crypto to watch, given its market capitalization.
