Why is Bitcoin price up today? BTC trades close to $43K


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  • After investors feared a bull trap, Bitcoin began its market recovery once more, back to trading at around $43,000.
  • Why is the market up? As expected, the Fed held interest rates unchanged for the third straight meeting on Wednesday. Officials kept the fed funds rate at 5.25%–5.50% but were open to market changes.
  • The Fed expects 75 basis points of rate reduction next year, lowering its 2024 fed funds rate to 4.6% from 5.1% three months ago.

The price of Bitcoin has risen today, reaching $42,888.30 after falling as low as $40,300 over the weekend. The rise reflects traders’ persistent bullish attitude toward Bitcoin, which had the highest November performance since 2020 and is expected to continue rising in December. 

According to CoinGecko, the price of Bitcoin (BTC) is $42,888.30 at the time of writing, with a 24-hour trading volume of $24,956,377,294.19. This indicates a 3.97% increase in the previous 24 hours and a -2.64% decrease in the last seven days.

Bitcoin escapes the feared bull trap

The return above $42,000 comes on the heels of a $4 billion BTC sale in two days, hitting an 18-month high. The market’s anticipation that a spot BTC exchange-traded fund (ETF) will be approved in January 2024 is reflected in the recovery, which is accompanied by strong capital inflows from institutional investors.

Furthermore, the Federal Open Market Committee (FOMC), a Federal Reserve (Fed) branch, has refrained from raising interest rates yet again, keeping them unchanged at $5.25%-5.50%. Fed Chair Jerome Powell sounded less hawkish in his press conference following the interest rate decision.

This is the third time in a row that the Fed has kept interest rates unchanged. It suggests that monetary policy is being eased despite the central bank’s continued focus on reducing inflation down to 2%. 

It also suggests that the Fed has finished raising rates after imposing the fastest run of increases in four decades while battling high inflation since the middle of 2022.

The Fed’s efforts to curb inflation continue, with the Fed attempting not to further harm the economy by increasing job losses. According to Powell, this appears to be working as the labor market’s development improves. 

Nonetheless, Powell emphasized the Fed’s willingness to tighten policy further if required, citing the fact that inflation, albeit falling, remains high and the way forward remains unknown.

Along with the announcement of interest rates, the Fed also provided its quarterly update of economic estimates. The central bank now predicts core inflation to be 3.2% in 2023, down from 3.7% three months ago. The end rate for 2024 is now projected to be 2.4%, down from 2.6% earlier. Real GDP growth for 2024 has been reduced from 1.5% to 1.4%.

The Fed now expects its fed funds rate to end 2024 at 4.6%, down from 5.1% projected three months ago, implying 75 basis points of rate decreases next year.

BTC’s market performance

Bitcoin price rose sharply in response to the FOMC minutes, reaching an intraday high of $42,886 before falling sharply and recovering again. According to CoinGecko, the global crypto market valuation is currently $1.67 trillion, a 3.18% increase over the last 24 hours and an 84.62% increase over a year ago. 

Bitcoin’s market cap is at $837 billion, reflecting a 49.99% Bitcoin market dominance. Meanwhile, the market cap of stablecoins is $130 billion, accounting for 7.78% of the total crypto market cap.

The fear with regard to centralized exchanges appears to have subsided. On December 11, the volume of bitcoin exchange trade reached a 6-month high. Despite having the lowest monthly volume on December 10, BTC trade soared, accounting for more than $16.4 billion in the preceding 24 hours.

Rates are falling in traditional markets, with the 10-year Treasury yield falling 12 basis points to 4.08%, its lowest level since August. Stock market indices in the United States have reached session highs, with the S&P 500 now up 0.6%. The price of gold has risen by less than 1% to $2,013 per ounce, while the dollar index has fallen by roughly 0.5%.

At 2:30 p.m. ET, Fed Chair Jerome Powell will hold a post-meeting news conference in which market participants will look for additional hints regarding the future path of monetary policy. Before to today, markets expected no movement at the Fed’s late January meeting, but almost half expected a rate cut at the March meeting, according to the CME FedWatch tool.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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