The flagship cryptocurrency, as well as the broader stock market, spiked up after the Federal Reserve announced a slew of new stimulus programs to provide relief from the recent downturn.
Bitcoin Surges Amid Financial Stimulus
Bitcoin is on the rise along with the Dow Jones Futures following the Federal Reserve’s commitment to continue its asset purchasing program “in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.”
Following the announcement, the flagship cryptocurrency surged nearly 14%, trading at a low of $5,850 to a high of $6,660 within an hour.
From a technical perspective, the sudden $810 upswing comes after a retest of the breakout point of a symmetrical triangle that formed on Bitcoin’s 1-hour chart. Now, the pioneer cryptocurrency could continue to rise and hit a target of $7,600, which is presented by this technical pattern.
This target is determined by measuring the distance between the initial high and low of the symmetrical triangle and adding it to the breakout point.
Meanwhile, Dow Jones Futures also rose pointing to a more than 400-point move higher at the open following the Fed’s announcement.
The continued stimulus comes after the substantial sell-off seen across all the major financial markets worldwide, according to the gatekeeper of the US economy.
“The coronavirus pandemic is causing tremendous hardship across the United States and around the world. Our nation’s first priority is to care for those afflicted and to limit the further spread of the virus. While great uncertainty remains, it has become clear that our economy will face severe disruptions. Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate,” affirmed the Fed in a statement.
While the Fed commits to adopt stimulus programs that provide relief from the recent downturn, Bitcoin appears to be benefiting as well.
Now, it remains to be seen whether the growing amount of incoming fiscal and monetary stimulus allows Bitcoin to definitively decouple from traditional markets and become the digital safe haven that many have talked about.
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