Bitcoin drop stalls near $40K as Congress examines another Covid-19 relief package

The intensifying debate on the need for another monetary stimulus by Congress sparked recovery signals across equities and cryptocurrencies. Looking at delayed fiscal tightening, the NASDAQ 100 rose about 2.7% since the 10 January trough, while Bitcoin (BTC) registered a marked reversal of about 7%, from $40,091 on 10th January to trading at $42,876 a piece on Monday, 17^th January 2022.

Senator Cardin advocates the need for aid for impacted businesses

Lobbyists are targeting legislation being crafted by Sen. Ben Cardin (D., Md.), the chairman of the Senate Small Business Committee, who had found an ally in Sen. Roger Wicker (R., Miss.) for a bill that would deliver roughly $60 billion in grants from the Small Business Administration.

Industry associations from professional sports, bus associations, convenience stores, hotel and restaurant are alone pushing for a total of $300 Billion stimuli citing no or partial relief in the earlier program.  While the lobby in the favour of yet another ‘Paycheck Protection’ like program grows in clout, The US Congress cites additional inflationary and budget pressures, which the stimulus would aid.

“The U.S. government has no money to give anyone. In the past two years, Congress piled on several trillion dollars to our already substantial deficit. This unprecedented accumulation of debt is causing today’s inflation and will continue to wreak havoc in the future.” said Sen. Rand Paul (R., Ky.).”

$40K marks news fundamental support for Bitcoin $100K run

Jurrien Timmer, Director of Global Macro at Fidelity Investments, shared a series of tweets suggesting the new fundamental support for Bitcoin developing at $40,000 levels, up from $30,000 in 2021. Timmer affirmed his observations with the dormancy flow metric (that helps confirm whether Bitcoin is in a bullish or bearish primary trend) being in the oversold zone.

“If inflation concerns persist in 2022, more investors might seek out Bitcoin as an alternative to their cash. Combined with the urge to buy the dip, the two forces could push it toward that $100,000 goal line” quoted Timmer.

Odds in the Senate: Survival amidst weakening US Dollar

Efforts to provide Covid-19 relief assistance appear to have support in the House. Nearly 100 Democratic and Republican lawmakers signed a letter in December calling for help for businesses.

Under modern Senate procedures, most legislation needs 60 votes for approval. Democrats and their allies control 50 votes, so Sen. Ben Cardin is seeking to sweeten the stimulus bill with provisions that can draw the support of 10 Republicans. He has the support of roughly a half-dozen Republicans so far.

Most Republican lawmakers say they aren’t eager for more government spending, though that could change if the Omicron surge further disrupts the economy and forces business closures and layoffs. Be that the case, we would witness more investments flowing into the digital assets market, helping Bitcoin (BTC) trace the $100K mark.

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