Bitcoin investors were greeted with a 12% surge in the cryptocurrency‘s value, continuing its upward trajectory on March 21. Consolidation occurred after a significant rebound, with Bitcoin responding favorably to the United States Federal Reserve’s decision to maintain current interest rates.
Federal Reserve’s Impact on Bitcoin
Post the Federal Open Market Committee meeting, Fed Chairman Jerome Powell hinted at potential rate reductions later in the year, emphasizing the necessity for more confidence in sustained inflation movement towards the 2% target. The BTC/USD trading pair avoided dipping to the $60,000 support level and climbed to $68,000, offsetting prior losses.
Noted investor Jelle declared in a recent market analysis that the immediate aim for Bitcoin is to preserve stability above the $65,300 mark. This uptrend caused significant losses for short sellers in the futures market, with blockchain analytics source CoinGlass documenting $70 million in Bitcoin short position liquidations on March 20.
Exchange-Traded Funds’ Influence on Bitcoin
UK-based investment firm Farside reported that on March 20, Bitcoin ETF products faced $261 million in withdrawals, notably with $386 million exiting from the Grayscale Bitcoin Trust. Other ETF funds recorded only marginal entries in comparison to the beginning of the month.
Despite these outflows, market sentiment remains buoyant. Commentator Dyme suggested that Bitcoin’s resilience against three successive days of ETF withdrawals demonstrates a new fortitude, independent of ETF fund movements for positive price action.