The Bitcoin price is approaching the $40,000 threshold. The first of the cryptocurrencies on the market benefits from the rise in stock market indices caused by the Federal Reserve of the United States.
After a sudden rise to the gates of 50,000 dollars, Bitcoin started falling again last month. For several weeks, the queen of cryptocurrencies has been stuck in a “range” phase: it oscillates between two values, namely 35,000 and 39,000 dollars. By falling back below the $35,000 mark, Bitcoin could inaugurate a new phase of decline.
On the other hand, by approaching 40,000 dollars, Bitcoin suggests thata new bullish phase is gradually taking shape, months after its all-time high of $69,000. It is this last scenario that seems to be favored by the market.
The price of Bitcoin benefits from the rise in stock market indices
In recent days, the price of Bitcoin has started to rise again. The value of cryptocurrency lives on around $39,000 since Wednesday, May 4, 2022. At the moment, the value of the digital currency does not seem ready to collapse to the lower supports, namely the $33-35,000 zone. Many analysts, however, expected a brief crash below these levels.
Once is not custom, the course of Bitcoin benefits froman announcement from the US Federal Reserve. On Wednesday, the organization responsible for issuing the dollar raised its main interest rate by half a point, its largest increase in nearly 22 years. Other increases “would be justified” in the future, the organization said. However, a stricter tightening is not on the agenda. The Federal Reserve hopes to correct the excesses of the health crisis gently, without causing a recession.
Investors and analysts were expecting a more severe rate hike in order tostem inflation, which reached 8.5% in April in the United States. In response, the markets rallied slightly. The New York Stock Exchange ended up sharply. The Dow Jones gained 2.81%, versus 2.99% for the S&P 500.
Read also: Did the CIA make Satoshi Nakamoto, creator of Bitcoin, disappear?
Since the arrival of institutional investors, Bitcoin has been strongly correlated with traditional financial markets. This is why the oldest cryptocurrency has taken on color along with the stock market indices.