The American Federal Bank gives a new round of monetary hike. The US central bank raised its interest rates on Thursday,15 June 2017 against the health of the US economy. It caused Bitcoin prices to fell down drastically.
As expected, the Federal Reserve raised the level of its key rates by a 25 basis point (0.25%) , moving its range between 1% and 1.25%. Although he has anticipated such a scenario for many weeks, the dollar market has welcomed the intervention of Janet Yellen. It has renewed its confidence in the US economy, noting in particular the marked improvement in the labor market. It also revised upwards its growth forecasts, forecasting a growth of 2.2% of GDP in 2017, and estimated that unemployment could fall to 4.3%. Despite slow-down inflation, the Fed boss said that the tightening was aimed at “lightening its accommodative policy towards a neutral pace”.
Janet Yellen,the Chair of the Board of Governors of the Federal Reserve System also announced the reduction of a balance sheet of the central bank fermented by its program of asset purchases. The amount of ABS(Asseted backed securities) will decrease by $ 6 billion per month, while MBS(Mortagaged backed securities) will decrease by $ 4 billion per month.
The Fed said it was ready to halt the disinvestment process if there were “a material deterioration in the economic outlook that would require a significant decline in interest rates.”
In line with its mission, the central bank seeks to stabilize consumer price inflation at 2% per year.
Thus, undergoing the rise of the dollar, the price of the Bitcoin is strongly neglected by the market.Analyzing technically , the Bitcoin price made a sharp decline on June 15th 2017 after the appearance of a bearish divergence taking shape in daily data. This collapse allowed the cryptocurrency to break a support at $ 2,620 and to pass under its moving average in 20 days. The intensity of the momentum confirms the short-term downside risk. Bitcoin price even touch $2050 on Poloniex. In Indian markets, Bitcoin price went down to INR 1,75,000.
Although the price of the cryptocurrency have recovered. At the time of publishing this article, Bitcoin price was $2464. In Indian markets, Bitcoin price was INR 1,89,278
Due to some political turbulence in US, stock markets are not satisfying the investors for quite some time. As a result people are shifting to Bitcoin and other crypto currencies. Japan was the leader in Bitcoin market and was dominating in terms of Bitcoin trading volume.
But for the first time in 12 months, US has overtook Japan to be the leader in Bitcoin market. This is in terms of trading volume.
The demand for Bitcoin and other cryptocurrencies in the US is rapidly increasing .Due to the recent recognition of Bitcoin as a Safe Haven Asset, alongside gold.
US is a dominating player in Bitcoin market. If policies are changed which distracts users in US from Bitcoin, prices will surely get affected.
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This article was contributed by author Bhargavi Sayee and modified by author at KryptoMoney.com for quality purpose.
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