Crypto News

Bitcoin Wobbles Around $50,000 but Downside Risks Persist; What’s Ahead?

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin was fluctuating above and below $50,000 during the Thursday session as traders received mixed signals from the macroeconomic landscape.

At first, the Federal Reserve Chairman’s recent testimony to the US Congress reiterated the central bank’s commitment to keeping interest rates near zero and purchasing $120 billion worth of government bonds and mortgage-backed corporate securities every month.

The promise alone increased investors’ risk appetite. They continued on to selling US government bonds, sending the yields on the 10-year note to their best levels since February 2020. Bitcoin, a super-volatile asset, has benefited the most by attracting daytraders and institutions that see the Fed’s quantitative easing programs as a cue for a bullish cryptocurrency against a weaker-looking US dollar.

That was visible all across the Wednesday session as two Wall Street firms—that were already holding bitcoin in their reserves—announced that they are increasing their exposure in the scarcer asset. MicroStrategy, a Nasdaq-listed business intelligence company, pushed its bitcoin treasury from about 71,000 BTC to over 95,000 BTC after investing an additional $1.06 billion.

Meanwhile, Jack Dorsey-backed Square added $170 million worth of BTC to its profile atop its $50 million worth of investment into the cryptocurrency.

Offsetting Bitcoin Bulls

Bitcoin prices, which had fallen by over 23 percent from their record high of $58,367 earlier this week, recovered back to as much as $51,415 on Wednesday. Nevertheless, the cryptocurrency was unable to push its upside bias any further as investors’ focus also remained glued on the US economy’s recovery prospects.

bitcoin, btcusd, btcusdt, cryptocurrency
Bitcoin struggles to push its prices higher in the short-term. Source: BTCUSD on

The bond sell-off eased late Wednesday after the US Food and Drug Administration approved the Johnson and Johnson’s coronavirus vaccine “safe and effective” while authorizing it for emergency use. Faster recovery in the pandemic could reduce the demand for additional fiscal and dovish programs from the US government, affecting Bitcoin’s growth.

But David Rosenberg, a longtime Wall Street economist, noted that a full economic recovery would take a long time.

“There’s this view that we’re going to embark on a massive spending party and life will go back to normal,” he told WSJ. “I just don’t believe that.”

Long-term, bulls expect Bitcoin to reach fresh highs as soon as the inflation fears kick in with lower fiat valuations and higher consumer price index.

How useful was this post?

Click on a star to rate it!

Yashu Gola

Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2014 – and has contributed to several cryptocurrency media outlets, including CoinChapter, NewsBTC, FxDailyReport, Bitcoinist, and CCN. Academically, Yashu holds a bachelor's in information technology, with majors in data structures and C++ programming language. He has also won the 'Atulya Award' for his efforts towards raising $100,000 for an India-based farming project.

Related "Bitcoin" News

Holo (HOT) Follow Up 2: Bearish Triangle Overpowering Bullish Wedge
Holo (HOT) prices underwent a bloody weekend like every other digital asset in the cryptocurrency market.
Bitcoin Weekly Analysis: Its Do or Die After Weekend Bloodbath
Bitcoin plunged hard alongside other top-cap digital assets as traders decided to secure their profits as the market sprinted...
Survey Shows 10% Of Fund Managers Believe Bitcoin Will Outperform In 2021
Long Beach (CoinChapter): Bank of America’s latest Global Fund Manager Survey provides an interesting look into how investors view...
Another Big, Bullish, Blasting Price Rally Awaits Bitcoin; Here’s Why
Yerevan ( — Bitcoin looks to capitalize further on Coinbase’s latest foray into Wall Street even as the cryptocurrency already...
Bitcoin Between March 2020 and April 2021: What Pumped the Token By 1,500%
The benchmark cryptocurrency added $4,024, or 6.74 percent, to reach a new record high of $63,774. Its move upside...
Bitcoin Holds Steady Above $60,000; Could It Hit $65,000 on Coinbase News?
Bitcoin (BTC) cautiously climbed above $60,000-benchmark during the weekend session and continues to hold the level as interim support...