Bitcoin found support from the Fed


Bitcoin recovered quickly after the Fed held its meeting and announced its results. It can be recalled that the markets expected the Fed to announce the start of a cut in the stimulus program in September, but this did not happen. Jerome Powell clearly stated that the Fed is ready to wind down QE and this program will be fully completed in mid-2022, but the regulator will continue to buy bonds worth at least $ 120 billion a month in the next two months. Therefore, the US economy will receive money printed by the Fed for at least two more months, some of which will settle on the cryptocurrency market. Investors immediately cheered up, realizing that the Fed has not yet tightened monetary policy, and rushed to buy risky assets. Bitcoin quickly recovered to the level of $ 43,852, but the trend remains downward since there is a descending trend line. In this case, we are only talking about the current upward correction of the world's first cryptocurrency.

The news from the Fed is definitely positive for the entire cryptocurrency market. This can be confirmed by the fact that almost all major cryptocurrencies, and not just bitcoin, are rising after the meeting. But at the same time, it should be noted that Bitcoin's fundamental background remains quite weak. To simply put it, there is no particularly positive news for it now. The validity of the growth of quotes from $ 30,000 to $ 53,000 in the last few months has been repeatedly questioned. However, it should also be recognized that the market does not always need these very rationales in order to buy cryptocurrency. A rebound from the level of $ 43,852 could easily trigger another decline. But since we have a buy signal in the form of a price rebound from the level of $ 40,746, we are talking about the growth of the cryptocurrency.

What should be expected from Bitcoin in the future?

We still suggest that traders pay extra attention to technical analysis, namely to the support and resistance levels, which are greatly worked out by the cryptocurrency, and form the corresponding signals. For example, a rebound from the trend line may follow in the upcoming days, which will return the bears to the market. However, Bitcoin's consolidation above the trend line will return the cryptocurrency to the upward channel, despite the fact that the "bullish" trend is very much completed.

The time when the Fed begins to wind down the QE program, as well as what kind of "infrastructure bill" Joe Biden will take, which involves amendments to the Tax Code – transactions with cryptocurrencies will be taxed, and all transactions worth more than $ 10,000 will go through the Tax Administration, will be very important. The first event may come in November when the Fed holds its next meeting. The second can be expected earlier since the infrastructure plan has been considered by both chambers of Congress for quite a long time.


There is a clear downward trend in the four-hour time frame. Bitcoin fell to the support level of $ 40,746 and broke through it even twice, but eventually rebounded from it. However, it can be recalled that the level of $ 43 852 was also broken on the third attempt, so nothing prevents Bitcoin from returning to the level of $ 40 746 again to break through it also on the third attempt. As long as the price is below the trend line, the downward trend remains.

The material has been provided by InstaForex Company -

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