Bitcoin price edges higher as Fed inflation meeting sends DXY to 2-month high

Bitcoin (BTC) is trading at $6,471.70 after hitting a recent intraday high of $6,512. The cryptocurrency is up 0.46 percent on the day and is currently on a bull run that has seen it rise more than 90 percent from last month’s all-time low of $3,000. Ethereum (ETH) and XRP (XRP) are also higher by 0.42 and 0.28 percent, respectively.

After a slight rally, Bitcoin price is up more than 3% on Monday, following an unexpectedly hawkish Federal Reserve at its latest meeting. The Fed’s decision to keep its benchmark rate in unchanged territory triggered a modest USD-dollar appreciation, driven by the market’s ongoing expectation of an eventual U.S. rate hike.

While the Fed’s announcement that they plan to raise interest rates in September sent the US Dollar to a fresh post-crisis high against the Japanese Yen, it also sent the price of Bitcoin higher too…. Read more about next fed meeting and let us know what you think.

Bitcoin (BTC) remained at low levels on the 17th. June below the $40,000 level when the rising US dollar added downward pressure on the price of BTC.

1-hour candlestick chart of BTC/USD (Bitstamp). Source: TradingView

BTC/USD rebounds to $38,000

Data from Cointelegraph Markets Pro and TradingView showed the BTC/USD trading around $39,300 on Thursday.

The largest cryptocurrency fell during the Federal Reserve’s meeting a day earlier, where Chairman Jerome Powell acknowledged that inflation could be higher than expected in the near term. According to Cointelegraph, the May Consumer Price Index (CPI) report showed that inflation hit a 13-year high last month.

But Powell’s confidence that inflation will return to normal long-term levels has ultimately contributed more to the dollar’s growth than BTC’s.

Yes, they are anchored, and they are in a good position right now – it’s good to see that they are away from their pandemic lows, Powell said in a later comment to the media about the inflation numbers.

In our new framework, the fundamental challenge is to ensure that long-term inflation expectations are anchored at levels consistent with our objective.

That target is currently around 2%, although the Fed acknowledges that there will be times when rates will rise above that level.

The dollar rose during the session and the U.S. Dollar Currency Index (DXY) reached a two-month high.

This is a classic source of friction for bitcoin, again testing already weak sentiment about the prospects of a further rise in 2021.

One-day candlestick chart of the U.S. dollar currency index (DXY). Source: TradingView

Bitcoin price edges higher as Fed inflation meeting sends DXY to 2-month high

A small forward opening provides a possible target

Popular crypto-Ed traders, however, pointed to the positive impact of BTC/USD bouncing off support at $38,000 at the intraday low.

Related: Pantera CEO: The panic in the crypto-currency market is waning, now is the time to buy.

Let’s not forget a possible extension to fill the CME gap, he added as part of his comments on the bottom, with the futures gap – another popular short-term price influence – at $37,000.

Meanwhile, fellow trader Peter Brandt noted a number of gaps that remain unfilled on BTC/USD, adding that he doesn’t think all gaps need to be filled.

CME bitcoin futures 1-day chart shows the gap on the 13th. June shows. Source: TradingView

Bitcoin price edges higher as Fed inflation meeting sends DXY to 2-month high

Cointelegraph previously reported on how bitcoin investors’ habits change during this long period of price decline.

Consumers are holding onto their coins longer, and even those who bought in the first few months of the bull market still don’t want to sell, the data show.

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