Bitcoin (BTC) saw a notable surge on March 20, reaching a two-week high amidst rumors of a potential "major update" in U.S. crypto policy.
The price of BTC/USD surged to nearly $87,500 on Bitstamp, stabilizing around $86,000 shortly after. This boost in value echoes a comforting Federal Reserve meeting on March 19, where officials opted to maintain interest rates, generating a favorable atmosphere for risk assets. Federal Reserve Chair Jerome Powell conveyed that inflation is "eased significantly," suggesting that there is no immediate need to alter policy stances. In his opening statement, Powell expressed a commitment to wait for greater clarity before making adjustments, which resonated positively across both the cryptocurrency and stock markets.
The S&P 500 responded with an increase of roughly 1% during the March 20 trading session, translating to a market capitalization boost of about $500 billion. Notably, Arthur Hayes, former CEO of the cryptocurrency exchange BitMEX, hinted at the Fed's delivery of a crucial signal to traders. "JAYPOW delivered, QT basically over Apr 1..." he remarked on X, alluding to a potential shift from quantitative tightening to quantitative easing.
Despite the uplift, Bitcoin traders are currently casting their gaze toward a potential announcement from the U.S. government, which is rumored to occur on March 21. Some analysts believe this upcoming announcement, likely revolving around President Trump's crypto strategy, may have significant implications for the crypto market. The Kobeissi Letter noted that this would mark Trump's first major update since the establishment of the national crypto reserve on March 6.
Earlier this month, President Trump signed an executive order creating a Strategic Bitcoin Reserve, which has been perceived with a cautionary lens, as it does not explicitly indicate the U.S. would be purchasing BTC immediately. The evolving market sentiment, however, is optimistic, now that Bitcoin has surpassed crucial resistance trend lines. Rekt Capital, a notable trader, outlined that Bitcoin only needs to rally by an additional 8% to reclaim higher price ranges, suggesting there is potential for further price adjustment moving forward.
The recent uptick can be particularly valuable considering that Bitcoin has already climbed about 13% since hitting last week’s lows.
In summary, as Bitcoin continues to navigate through these shifting landscapes of Fed policy and potential government announcements, the outlook remains cautiously optimistic for traders looking to capitalize on these developments.