Bitcoin Starts New Week On Corrective Note After Recent Price Rally

Bitcoin starts new week on a corrective note after it posted a strong and impressive rally during the weekend. In our latest bitcoin news today, we can see that the exchange rate slipped 0.41% to $19,088 and the pair managed to keep the downside momentum intact.

The BTC/USD pair suggested that it could continue its bearish correction even further and will be able to neutralize the technically overbought sentiments. However, the bears are cautious about the anti-fiat developments in the macroeconomic sector while the US dollar struggled to hold its support level in December and dropped by more than 4% from its highs set in September. The pair risks more price correction as unprecedented efforts taken by the fiscal authorities are still playing out.

The Federal Reserve’s policy decision for 2020 could shake up the Dollar’s support even further while aiding BTC’ bullish bias. In the upcoming Federal Open Market Committee’s meeting, the central bank will leave the interest rates for BTC intact at 0-.0.25 percent by promising to keep them until they hit maximum employment and inflation of more than 2%. The market expects no changes to be made in guidance related to the FED asset purchase program and the central bank even purchased 80 billion of Treasuries and $40 billion of mortgage-backed securities each month so the officials committed that they would keep purchasing the debt at the current price in the upcoming few months.

The combination of the low-interest rates and unlimited bond purchasing seems to benefit BTC as the cryptocurrency surged by about 400 percent from its mid-March levels against the policies because they made holding the treasury notes with low yields and the US dollar less appealing to the investors. The environment is perfect for BTC to emerge as a safe haven asset with the flurry of mainstream institutions like public-traded companies such as Square and Microstrategy already invested millions into the cryptocurrency as an anti-fiat measure.

As Bitcoin starts the new week on a corrective note, the price seems like it will consolidate below $20,000 until a new signal from the FED is received on Wednesday. In the meantime, the target looks far-fetched while uncertainly related to another stimulus over political issues with the dangers of another lockdown during the rising COVID-19 pandemic cases continue. In the meantime, a technical correction looks imminent as long as the RSI of BTC alerts overbought signals. Approaching the $20,000 level could result in another sell-off by daytraders to even $16,000 or lower.