Is Bitcoin Dead? Or Not

Is Bitcoin Dead? Or Not. As Rally Following the Fed’s Rate Decision. It’s a Safe Haven Play in the Middle East.

2 November 2023

Is Bitcoin dead? Or not. Bitcoin and other cryptocurrencies surged on Thursday, buoyed by an increase in risk appetite as markets increasingly expect the Federal Reserve to stop hiking interest rates in its fight against inflation.

Bitcoin’s price has risen 2.5% in the previous 24 hours to $35,300, surpassing last week’s top of roughly $35,000 and approaching the $36,000 mark – its highest level since cryptos entered a harsh bear market in May 2022. The largest digital asset has gained more than 30% in a couple of weeks, ending a multi-month trend of low volatility and trading volumes to resume its usual behavior.

According to Alex Kuptsikevich, an analyst at broker FxPro, Bitcoin breached the top border of the weekly consolidation, surging above $36,000 early on Thursday before falling again. Technically, the latest increase confirms the bullish tendency. Although Bitcoin may not find substantial opposition until $41,000, the maximum aim for current momentum is $46,000, where the last reversal occurred.

Several factors are pushing cryptocurrency prices upward. There is still considerable hope that the Securities and Exchange Commission (SEC) will soon approve a spot Bitcoin exchange-traded fund (ETF), which would bring in a new wave of retail and institutional investment. The geopolitical danger posed by the Middle East crisis has also rekindled calls for Bitcoin to be seen as a safe-haven asset, similar to gold.

The Fed’s monetary policy announcement on Wednesday is the latest fuel for crypto advances. While the central bank indicated that interest rates might be raised further to manage inflation, market pricing of rate futures implies that traders are satisfied that the central bank’s work is complete. Since early last year, the Fed has hiked borrowing prices at the fastest rate in a generation, as inflation reached a multi-decade high, with a tightening in financial conditions smashing risk-sensitive assets like stocks and cryptos.

Bitcoin, like the Dow Jones Industrial Average and the S&P 500, has profited from the Fed decision and the market’s dovish view, demonstrating that macroeconomics is still important to crypto traders, providing negative responses to the question: Is Bitcoin dead?

Beyond Bitcoin, Ether, the second-largest cryptocurrency, increased by more than 1% to $1,830. Smaller currencies or altcoins performed even better, with Cardano rising 7% and Polygon rising 6%. Memecoins performed similarly, with Dogecoin rising 5% and Shiba Inu rising 4%.

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