Bitcoin rallied on Thursday after the Federal Reserve vowed to support the economic recovery in the United States.
The benchmark cryptocurrency jumped 3.80 percent to $58,083 after declining two days in a row. Meanwhile, its rivals across the crypto space, including the second-largest token Ethereum and its runner-up Binance Coin, also surged higher. Almost all alternative cryptocurrencies have a positive correlation with Bitcoin.
Dovish Fed
Traders started flocking into the cryptocurrency sector after minutes from the Federal Reserve’s March meeting, released on Wednesday, which showed the central bank officials are optimistic about a sustained rebound in inflation. They committed to keep their easy monetary policies unchanged until employment recovers fully from the pandemic-led economic aftermath.
“Those big mental readjustments by the market contemplating the growth outlook and what that would mean for inflation have been fully digested,” said April LaRusse, head of investment specialists at Insight Investment.
The US dollar index, which tracks the greenback’s strength against six major foreign currencies, was initially firm to the Fed’s continued dovish stance. Nevertheless, it fell by 0.38 percent on Thursday, raising fears that the dollar might resume its downtrend after inching higher so far into 2021.
Bitcoin, which does well when the dollar underperforms, rose inversely to the greenback’s performance in the previous 48 hours. Tom Jessop, president of Fidelity Investments’ digital assets wing, noted that the cryptocurrency has now matured as a global investment asset, which might continue to get better in coming years.
“I think we continue to see adoption at an accelerated pace for a host of reasons,” he said at an event hosted by MarketWatch and Barron’s this Wednesday.
Bitcoin Technical Outlook
The BTC/USD exchange rate showed possibilities of breaking bullish above $60,000.
The pair trades inside an ascending triangle, which is technically a bullish continuation pattern in an uptrend. Its breakout target sits as high as the maximum distance between its upper and lower trendline. Therefore, if bitcoin breaks bullish above the Triangle’s upper trendline resistance (around $60,000), it would target at least $70,000 as its next upside target.