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Bitcoin (BTC) Price Temporarily Reaches $68,000 as US Dollar Weakens Following Fed Chair Powell’s Dovish Comments
The Bitcoin (BTC) price momentarily surpassed $68,000 on Thursday, following a decline in the US dollar after dovish comments from US Federal Reserve Chair Jerome Powell, coming within approximately 2% of the record highs achieved earlier in the week.
Currently at $67,500, the Bitcoin price is about 14% higher compared to the lows recorded earlier this week, which were below $60,000.
The Bitcoin price has been on a rollercoaster this week. Source: CoinMarketCap
After reaching new record highs on Tuesday, a wave of profit-taking surprised the market.
A subsequent series of leveraged long liquidations caused the Bitcoin price to briefly drop below $60,000.
However, robust ongoing net inflows into spot Bitcoin ETFs provided significant support for the BTC price.
Additionally, macroeconomic factors are influencing the market on Thursday, as traders increase their expectations for near-term Fed rate reductions.
Fed Chair Powell stated on Thursday that the central bank is “not far” from achieving a level of confidence that inflation is moving back towards the Fed’s 2.0% target, which would allow for interest rate cuts.
In simpler terms, Powell indicated that the Fed is close to reducing interest rates.
Macro traders reacted by increasing their expectations that rate cuts could begin by June.
According to the CME’s Fed Watch Tool, the market-implied probability of at least one 25 basis point rate cut by June rose above 75% from below 70% just one day prior.
This development exerted pressure on the US dollar as short-term US yields decreased, while also benefiting tech stocks.
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Cryptocurrency typically shows a positive correlation with tech stocks and a negative correlation with the US dollar and yields.
What’s Next for the Bitcoin (BTC) Price?
Traders will be observing whether the Bitcoin price can revisit Tuesday’s record highs before the week concludes.
Having increased over 55% in the last 30 days, some traders are expressing concerns that Bitcoin has surged too rapidly ahead of the upcoming halving.
Historically, the Bitcoin price often experiences a rally followed by a correction around the halving period.
However, others believe that the emergence of a new demand source from spot Bitcoin ETFs could make this time different.
With favorable macro conditions, the risks appear to lean towards further upside this month, with Bitcoin potentially aiming for the $70,000s and beyond.
Nonetheless, BTC option market pricing indicates apprehension regarding the short-term outlook, while showing greater confidence in the long-term perspective.
This is evident in a 7-day 25% delta skew on Bitcoin options of 4.5, compared to a 180-day 25% delta skew on BTC options of nearly 8, according to data provided by The Block.
A positive 25% delta skew indicates that option buyers are paying a premium for bullish calls relative to equivalent bearish puts.
The likelihood of Bitcoin reaching $100,000 in 2024 remains very high.
The post Bitcoin (BTC) Price Briefly Retakes $68,000 as US Dollar Dips on Dovish Remarks from Fed Chair Powell appeared first on Cryptonews.
