Bitcoin traded around $65,847 on Wednesday and was down 0.3 percent on the day. The focus in the cryptocurrency market was the interest rate decision that the US Federal Reserve will announce after the two-day policy meeting.
FED meeting and oil prices are being watched
The general expectation in the market was that the FED would leave interest rates at the current level. The meeting is also closely followed as it is the first policy meeting under new president Kevin Warsh. Investors are focused not only on the decision text but also on the signals that may be given regarding the next direction of monetary policy.
Interest rates that remain high or remain unchanged can generally put pressure on assets that are sensitive to risk appetite, such as Bitcoin. On the other hand, the decline in energy prices is among the factors that alleviate inflation concerns to some extent. After the preliminary agreement announced between the USA and Iran, the price of crude oil decreased to approximately 80 dollars per barrel.
The decline in energy prices following the preliminary diplomatic agreement announced between the USA and Iran stood out as one of the headlines supporting the risk-taking tendency in the market.
With the impact of these developments, Bitcoin recovered from the levels below $ 60,000 seen in the previous part of the month. The price, which approached $70,000 last week, was later pulled back to the current trading range.
BlackRock emphasizes $9 trillion in cash
Rick Rieder, investment director responsible for global fixed income investments at BlackRock, one of the world’s largest asset management companies, said that the amount of cash waiting outside financial markets could reach up to $9 trillion. According to Rieder, this resource can be directed to the markets again when suitable conditions occur.
Mini glossary: An ETF is an investment fund that tracks the price of an asset or basket of assets and is bought and sold on the stock exchange like a share. Spot Bitcoin ETF refers to the fund structure that directly tracks the Bitcoin price.
In his interview with Bloomberg, Rick Rieder said that there is a huge accumulation of cash waiting on the sidelines, and if this money returns to the market, the effect could be quite strong.
Rieder also stated that the decline in energy costs indicates that inflation pressure may weaken and argued that interest rates should be kept constant. Bitunix analyst Dean Chen also interpreted this assessment as a sign that capital is looking for a new direction rather than a lack of liquidity in the market.
New Bitcoin ETF application is on the agenda
BlackRock has filed its regulatory filing for the iShares Bitcoin Premium Income ETF. The transaction code of the fund was announced as BITA. Bloomberg ETF analyst Eric Balchunas noted that such filings generally point to a launch in about a week.
On the other hand, it was reported that there has been an outflow in spot Bitcoin ETFs for the last five weeks, but this outflow rate has started to slow down recently. Analysts monitoring the technical outlook in the market emphasize that Bitcoin is stuck between the weekly 200-day moving average and the 200-day exponential moving average. Accordingly, moving the weekly close above the 200 EMA may support bullish expectations. On the other hand, falling below the 200 MA level may bring lower price targets to the agenda.
Bitcoin reached its historical peak of $126,000 in October last year. Now, the main agenda of the markets is the FED interest rate decision to be announced on Wednesday afternoon and the possible impact of this decision on risky assets.
