Bitcoin Up 5%
Over the past night, Bitcoin has risen in price by 5%, rising to $20,250, according to Binance. The cost of the cryptocurrency may show the first week of growth after three weeks of decline. What are the reasons?
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The Situation In The Stock Market
The growth of bitcoin began to be observed after the rise of American stock indices by 2%. Traders were evaluating the statements of the head of the Fed, Jerome Powell. In his last speech, Powell said that the Fed is fully focused on reducing inflation in the US. He added that the Fed intends to return to the 2% inflation target. The next Fed meeting will be held on September 20-21, and an increase of 75 basis points is expected.
Against the background of the speech, the Dow Jones Industrial Average rose by 193.24 points (0.61%) and amounted to 31,774.52 points. Nasdaq Composite scored 70.23 points (0.6%) – 11862.13 points. Standard & Poor’s 500 rose by 26.31 points (0.66%) to 4006.18 points.
ECB Fights Inflation
The ECB raises its base lending rate by 75 basis points to 1.25%, the deposit rate to 0.75%, and the margin loan rate to 1.5%.
Such a decision of the regulator was made for the first time in history. Thus, the EU authorities have to take emergency measures to stabilize the economy. Problems in the energy and logistics sectors, as well as rising food prices, led to this decision.
In August, inflation in the EU reached 9.1%. According to the regulator, inflation in 2022 will reach 8.1%, 5.5% in 2023, and 2.3% in 2024. The ECB does not rule out further rate hikes.
Thus, the recent actions of the ECB only confirm that global tightening is gaining momentum. In other words, there is no prospect of a resurgence of bullish trends for cryptocurrencies.
At the moment, there are no exact reasons for the sharp growth of bitcoin, as well as global factors for the recovery of the crypto market, experts say. In their opinion, the pressure of the bear market will only increase towards the end of September. Therefore, it is more likely that the price of bitcoin will remain in the current range and will not exceed $25,000.