 March 18, 2021  Everything you need to make sense of the crypto markets and beyond Sponsored By:  By the CoinDesk Markets Team Edited by Lawrence Lewitinn If you were forwarded this newsletter and would like to receive it, sign up here. Bitcoin (BTC) +6.3% $58,523 Ether (ETH) +2.9% $1,817 (Price data as of Mar. 18 @11:00 UTC) Good morning. Here's what we're writing about:
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MARKET MOVES by OMKAR GODBOLE Bitcoin Price Gets Fed Boost, but Bond Yields Could Play Spoilsport: Analysts Bitcoin's bull run looks set to continue after the Federal Reserve reconfirmed its pro-stimulus stance this week.
"The narrative for bitcoin (BTC, +6.29%) as the preferred store of value has only strengthened in the wake of Powell's comments," Matthew Dibb, co-founder and COO of Stack Funds said. "Our outlook on BTC remains very bullish, recent retracement to $53,000 was a short-lived pull back before the cryptocurrency makes way to fresh all time highs."
Fed Reserve Chair Jerome Powell pushed back against speculation of an early unwinding of monetary stimulus on Wednesday, boosting the appeal of inflation hedges such as bitcoin.
"The strong bulk of the committee is not showing a rate increase during this forecast period," Powell said during a virtual press conference Wednesday following a meeting of the Federal Open Market Committee, according to Bloomberg. The central bank head added that it was "not yet" time to talk about reducing the central bank's liquidity-boosting asset purchases.
Bitcoin picked up a bid near $55,500 following the Fed and rose nearly to $59,500 early today.
According to Denis Vinokourov, head of research at trading sentiment data provider Trade the Chain, further gains could be in the offing due to the Fed's decision to raise the per counterparty limit in the overnight reverse repurchase operations from $30 billion to $80 billion.
"The hike implies that the Fed wants to keep overnight rates [short-term borrowing costs] low," Vinokourov said. "Thus, its dollar-negative and in turn should spur on flow back into assets."
Besides, with the Fed-related uncertainty out of the way, bitcoin and the broader crypto market may now see a "stimmies' rally," as tweeted by trader Alex Kruger. As per Mizuho Securities' estimates, Americans may spend nearly $40 billion of the latest round of direct stimulus checks on bitcoin and stocks, boosting their prices.
Bitcoin's daily chart is also painting a bullish picture.
 Bitcoin daily chart (Source: TradingView)
Bitcoin jumped over 3% on Wednesday, confirming a bull revival signaled by Tuesday's "hammer" candle and shifting focus to record highs above $61,000 reached on Saturday.
Yield worries persists
Bitcoin bulls will be keeping an eye on the U.S. bond market, as a faster rise in yields could weigh over equities, inviting selling pressure for bitcoin, too.
"A rise in yields is problematic period, but a speedy ascent can destabilize markets," Kruger told CoinDesk in a Telegram chat.
Equities and bitcoin took a hit in the last week of February, with the latter falling by 20%, as the 10-year yield spiked to 12-month highs above 1.5%.
Similar downturns could be seen if the yield continues to rise. At press time, the 10-year is seen at a 14-month high of 1.72% versus 1.62% pre-Fed Reserve announcement and 1.52% a week ago. The Fed's reassurance of continued stimulus support has so far failed to keep the benchmark yield from extending its recent rise.
However, pullbacks in bitcoin, if any, would be short-lived, according to LMAX Digital's currency strategist. "As bitcoin matures into a full-fledged store of value asset, risk-off events will be bitcoin-supportive," Kruger said in a Twitter response to this article's author.
Bitcoin is currently changing hands near $58,450, up 6.3% over 24 hours, according to CoinDesk 20 data.
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TECHNICIAN'S TAKE by DAMANICK DANTES
Bitcoin Rallies Towards $60K Resistance, Short-Term Support Seen at $56K
Bitcoin (BTC) buyers defended support around $54,000 yesterday, but the upside has stalled just shy of the $60,000 resistance level. The short-term trend is improving, which should keep traders active at lower support levels.
Hourly chart shows bitcoin holding support, albeit with an overbought RSI.
- Oversold signals on the hourly relative strength index (RSI) identified in yesterday's post triggered a near 10% rally.
- Bitcoin is now overbought on the hourly chart, which was previously seen around $61,000 – the all-time-high that was short-lived.
- Support is around $56,000, defined by the 50-period volume weighted moving average on the hourly chart.
- The daily chart still shows slowing upside momentum, but trend support remains intact.
--Damanick Dantes
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BOLO
Be on the look out for these upcoming events:
- 15:55 UTC (11:55 a.m. EDT): Speech by Fed chair Jerome H. Powell. Closing remarks at the Bank for International Settlements Committee on Payments and Market Infrastructure Conference (via prerecorded video). Watch live.
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BIGGEST MOVERS
These are the biggest movers in the CoinDesk 20 over the past 24 hours:
Notable Gainers:
Notable Losers:
- None of the assets in the CoinDesk 20 is down over the past 24 hours.
The CoinDesk 20 filters from the larger universe of thousands of cryptocurrencies and digital assets to define a core group of 20. These assets constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges.
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ICYMI
The US Bitcoin ETF Race Heats Up; Markets Await Fed Chair Powell's Press Conference
More companies are filing for bitcoin ETFs and more types of bitcoin ETFs; we get the latest from Valkyrie's Steven McClurg. Also, a market check with analyst Michele Schneider ahead of Federal Reserve Chairman Jerome Powell's press conference today; Ernst & Young's Paul Brody weighs in. Are inflation fears and bitcoin's price too high?
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From the world leader in crypto news and events, the all-new CoinDesk TV covers the rapidly evolving world of digital finance and its role in the global economy. On Community Crypto, "Bitcoin and Black America" author Isaiah Jackson explores how crypto is creating and impacting communities. Jackson will organize virtual meetups in the U.S. and around the world, then dive deeper into key themes, issues or questions that arise.
Watch Community Crypto Thursdays at 5 p.m. ET on YouTube or CoinDesk.com.
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.
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