BTC Expects A Retest Of Record High Levels After Powell’s Testimony

BTC expects a retest of the record high levels after Powell’s testimony as we are reading more in our latest Bitcoin news.

The depressed real rates, rising inflation hopes, and the crashing US Dollar could underpin BTC prices in the upcoming sessions. Holding the 20-day simple moving average as the support could start an upside bias. In the meantime, the extended downside correction will let the market retain the long-term bullish sentiment. BTC Dropped by 20% after touching the record high of $58,367 as the traders started to secure the profits against the US Economy recovery prospects. The benchmark cryptocurrency expected to recover in the sessions ahead and BTC expects a retest of the record high as Jerome Powell attends his monetary policy testimony before Congress while savvy crypto investors think that the Federal Reserve Chairman’s economic outlook will underpin the prices.

Powell could reiterate the bank’s commitment to supporting the economy of the US by keeping the benchmark rates at the record lows while still contributing to purchase about $40 billion of mortgage securities and the $80 billion of the Treasury notes each month. It will eventually continue the easing program until the US economy achieves huge employment and stability goals. The impending delivery expects to keep the yields on short-dated Treasury notes to zero and pushed investors into the long-dated bonds as a safe-haven.

Powell could repeat his calls for the expensive monetary support to boost the economic recovery and in his statements from before, the chairman said that it will require a “society-wide commitment, with contribution from across government and the private sector” to start recovering jobs. His comments became quite meaningful especially because of the disappointing data from the US labor market from December and January. This led to the possibility of going extra-aggressive on its dovish policies which could lead to treasury’s purchase as the central bank that avoids pushing the short-term bonds yields below zero. Michelle Meyer who is an economist at the Bank of America said:

 “Powell will likely note recent progress in the data but reiterate that the economy is far from fully recovered, thereby defending the accommodative monetary policy.”

Ben Lilly commented further:

 “It’s my opinion that if the dollar starts to gain strength and yields start rising, then either the FED or more U.S. government stimulus will take place (early estimates are late March). If so, then it’s back to the races for bitcoin. The timeline for this to play out would be nearly all of March.”