Bitcoin surges 7%, returns to $70,000 mark – Could it be due to the Federal Reserve?
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In the final week of March, Bitcoin experienced a sharp increase, returning to the $70,000 mark. According to Coin Metrics, the price of the world’s leading cryptocurrency rose by 7.8%, reaching $70,995.48 USD. At one point, Bitcoin even reached $71,239.31 USD during the late afternoon trading session after the stock market closed. Ether also saw a 7.4% increase, reaching $3,634.80 USD. Most other cryptocurrencies followed Bitcoin’s upward momentum.
MicroStrategy’s stock rose by 21%, while Coinbase saw a 9% increase. Stocks of companies involved in cryptocurrency mining also experienced gains, with Riot Platforms rising by 9%, CleanSpark soaring by 19%, and Cipher Mining increasing by 13%.
Bitcoin has been in a corrective phase after reaching an all-time high of $73,797.68 USD on March 14th. Last Wednesday, it dropped to a low of around $60,800 USD. Alex Thorn, the head of research at Galaxy Digital, stated that such a decline falls within the range of short-term corrections in a bull market.
The exact reason for Bitcoin’s strong surge at the beginning of the week is still unclear. However, the price action of the cryptocurrency in March primarily involved reaching new highs followed by substantial price decreases. Thorn advises investors to temporarily stop selling shares of Bitcoin ETFs.
Experts suggest that the record outflow of funds from GBTC over the past two weeks may be due to Genesis and Gemini liquidating, causing spot prices to decrease. Sam Callahan, the chief analyst at Bitcoin service company Swan Bitcoin, believes that Bitcoin’s price increase may be related to the message from the Federal Reserve (Fed) last week.
He points out that the Fed is considering both interest rate cuts and reducing the pace of quantitative tightening this year. Such actions would improve liquidity conditions and act as a positive catalyst for asset prices. Bitcoin responded positively to the Fed’s message that monetary policy may loosen in the near future.
Despite some price corrections, Bitcoin is concluding a successful March. Its price has increased by 14% in the month and 66% since the beginning of the year.
According to CNBC