First Mover Asia: Bitcoin, Altcoins Climb Following Fed Reserve Chief’s Inflation Reassurances

Bitcoin and other Altcoins have seen a climb in price in the last few days. Bitcoin, in particular, rose to US$43,106 last Tuesday, January 11th. As of this writing, the world’s most popular cryptocurrency maintains around US$43,894 per token. This climb in price is said to be the result of the Federal Reserve’s attempts to combat inflation. 

What led to the rise of Bitcoin and other Altcoins?

As the world is still dealing with a pandemic, countries, especially in the US, are keeping watch against inflation. Thus, the Federal Reserve, the central banking system of the United States, has devised plans to ensure that inflation is taken under control. Jerome Powell, the current chairperson of the Federal Reserve, spoke during the US Senate confirmation hearing about the said plans of the US central bank. According to Powell, they are prepared to raise the rates and reduce the balance sheets to prevent inflation.

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Due to Fed’s intervention, Bitcoin and the other Altcoins have seen a significant rise in the market. Ethereum, the second most famous cryptocurrency, has been rising since it dropped under US$3,000 on January 10th at 2:30 pm. Currently, an Ethereum token is priced at US$3,376. Other altcoins also saw a rise in value since Tuesday.

Bitcoin’s movement in the market

According to Coindesk, the cryptocurrency market has been behaving like a risk asset, making its volatility high. They also claimed that this high volatility started when the CPI Data was announced two months ago. Being the leading crypto coin, Bitcoin has seen a significant price rise and fall. 

Bitcoin’s most notable peak occurred on November 8th, 2021, when it reached US$68,000. This peak is its highest since the crypto coin was launched. It came as a surprise since the crypto coin has been within the US$30,000 range since the middle of 2021. However, it gradually followed a downward trend towards the end of 2021.

When Bitcoin’s price fell to US$41,500 on January 8th of this year, it began to rise again. Although the price went down to the US$30,000 range last January 10th, it has continuously climbed since. As mentioned, Bitcoin’s value is nearing US$44,000 as of now. 

Experts’ take on Bitcoin’s market performance

Since Bitcoin went above US$40,000 which is its support level, buyers are expected to return to the market. However, technicians notice that the price rises are quite resistant to go over US$45,000. Thus, Bitcoin may remain within that US dollar price range for now. However, it is likely to break into the US$45,000 resistance level and can resist again on the $48,000 mark within the next few days. 

Should you buy Bitcoin now?

However, despite the price rise, experts suggest traders do nothing for now with their Bitcoins. Its high volatility state makes it risky to buy or sell since these rises do not guarantee a long-term reversal. They also predict that the value of Bitcoin and other cryptocurrencies will continue its high volatility in the long run therefore traders should learn how to deal with it. 

* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.