Key Bitcoin, Ethereum Takeaways
- Fed looks to end monthly bond purchases and hike interest rates sooner, despite Omnicron variant concerns.
- Bitcoin and Ethereum markets are unfazed by the Fed’s returning hawkish stance.
- Both blue-chip crypto assets are still on course to log new all-time highs.
JAIPUR (CoinChapter.com) – Bitcoin and Ethereum markets maintained their upward stance despite the US Federal Reserve’s hawkish take on inflation. Both blue-chip crypto assets look to resume their uptrend on the back of returning buying pressure.
Although Fed’s reversal from its usual dovish self scared BTC and ETH bulls on November 22, traders quickly adjusted their positions keeping in mind the implications of staying invested for the long haul.
Related: Bitcoin week ahead Ep18: Hawkish Fed policy expectations keep BTC under pressure
Fed Adamant About Arresting Inflation
As per the latest reports, Federal Reserve policymakers are resolute about ending the monthly purchase of treasury bonds and mortgage-backed securities as soon as possible.
The Fed kick began tapering its debt purchases in October, with June 2022 as the ETA. But recent comments from Atlanta Fed President Raphael Bostic indicate a sooner end to bond-buying, preferably by March 2022.
“I think having this finished some time before the end of the first quarter would be in our interest.”
said Mr. Bostic
Also, the central bank may even be looking into hiking the benchmark interest rates early next year to trap inflation.
“…there’s going to be a good case to be made that we should be pulling forward more interest rate increases and perhaps even do more than the one I’ve penciled in.”
noted Mr. Bostic
Fed Governor Randal Quarles shared the Atlanta Fed President’s opinion of accelerating the rate of tapering. At an American Enterprise Institute event, he blamed rising demand as the primary cause behind inflation. The Federal Reserve must reign in the ballooning consumer demand, he asserted.
“I certainly would be supportive of moving the end of the taper forward.”
Fed Governor Quarles observed
Related: Here’s how Gold and the US Dollar may react to Fed’s tapering move
Jerome Powell, the incumbent Fed chairman, usually known for taking things nice and easy, finally threw in the towel as well. He ditched the “transitory tag” for inflation in the recent meeting with the US Congress and called for a quicker taper.
But Bullish Outlook For Bitcoin And Ethereum Looks Good
Although the Federal Reserve’s hawkish comments did shake out weak hands, causing Bitcoin and Ether to dip a few basis points, the overall outlook for the top two cryptocurrencies remains bullish.
Bitcoin has been posting higher lows ever since the BTC/USD picked up from Jul 20 lows. The trajectory resembles an upward sloping channel with BTC looking to correct down to $52,000 levels (read lower channel trendline). But the benchmark cryptocurrency may create a good long opportunity for bulls with an interim upside target sitting near $60,000.
The moving average convergence divergence (MACD) indicator looks ready to flip bullish, and the relative strength index (RSI) wave is also trending neutral. Both setups support the long-term bullish bias.
As far as Ether is concerned, the ETH/USD daily chart points to an October-style rally. Bullish traders anticipate a new all-time high at $7,500 by Q1 2022.
Related: Ethereum eyes $20K as ETH fundamentals and technical setups flip bullish
Closing above $7,500 would open the gates for a run towards $8,000 and beyond. The moving average convergence divergence (MACD) indicator flipped green, and the relative strength index (RSI) with a 56.65 reading implied incoming buying pressure.
