a bitcoin standing vertically atop a large pile of blue Viagara pills, realistic, bright

Bitcoin Spikes on Powell's Nod to Crypto's "Staying Power"

By:Thomas Westwater

Bitcoin showed stamina against an otherwise deflated market. In unrelated news, Pfizer traded lower.

  • Stocks fall as Powell Signals more rate cuts.

  • Bitcoin rises on "staying power" of crypto as an asset class.

  • Is the technical outlook for Bitcoin poised for more gains?

Technology shares led U.S. equity markets lower on Wednesday as investors digested comments from Federal Reserve Chair Jerome Powell in testimony before the House Financial Services Committee. Nasdaq futures (/NQ) were about 1% lower going into the final trading hour.

Stocks fall as Powell tempers market sentiment

Powell reaffirmed the Federal Open Market Committee’s (FOMC) commitment to raising interest rates later this year. The Fed paused at this month's meeting. That spoiled some lingering optimism among those calling for a potential peak in the cycle. It was just a few months ago that rate cuts were expected.

While market bulls have found themselves up against the ropes, the view that the Fed will cut rates next year may see their position pivot amid prevailing trends that lean to the bullish case, such as growth potential from artificial intelligence developments and a still-resilient underlying economy, evidenced by a tight—although arguably not a strong—labor market.


Bitcoin sails higher on bullish tailwinds

Bitcoin rallied on Wednesday despite the broader risk-off tilt across equity markets, underpinned by comments from Powell’s testimony. The Fed chief said Bitcoin as an asset class has “staying power.”

Traders pushed Bitcoin higher by about 6% by late afternoon Wednesday, which followed a 5.5% gain from Tuesday. EDX Markets, a new crypto marketplace was launched recently and has stoked a sense of permanence in the market with backing by Citadel Securities and others.

Unlike FTX and other exchanges, EDX will not hold customer assets but will use its platform to match buyers and sellers by price and then transfer assets and cash between each other to settle trades. This removes some of the risk that customer funds can be lost or mishandled.

Technical analysis

Bitcoin prices punched through their 50-day simple moving average (SMA), and the April swing high at 31,035, a likely area of resistance, is now in view. A break above the April level would likely inspire more buying.

Meanwhile, the relative strength index (RSI) is nearing the 70 overbought level for the first time in several months. A crossover may also invite more buying. Alternatively, a fade in the move may bring prices back to the 50-day SMA, with a break below the level warranting another look at its technical posture.

Thomas Westwater is a tastylive financial writer and analyst. He has eight years of markets and trading experience. 

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