Bitcoin Spikes on Powell's Nod to Crypto's "Staying Power"
Jun 22, 2023
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.
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 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.
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.
Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.