The latest cryptocurrency news show the Bitcoin price eyeing new $7,000 levels following a major decision by the Fed and a statement which proved the confidence of the Federal Reserve one more time.
On March 24, the United States Federal Reserve revealed the true extent of its money printing. After having cleared $6,000 on Monday, the BTC/USD pair went on to hold ground at around $6,500. At the same time, the Bitcoin news show that we could see BTC and gold rallying even more, while market analysts suggested that the recent selloff was over.
The precious metal trades at nearly $1,605 as we speak, having a daily improvement of more than 3%. Meanwhile, the Bitcoin price eyeing $7,000 came as a response of this and a sign that the crypto markets are not dead during this resistance phase.
For gold, the rebound echoed behaviour during the financial crisis of 2008, as Goldman Sachs highlighted in a piece quoted by Bloomberg. Then, as now, the Fed removed barriers to dollar liquidity which ultimately sent the precious metal shooting higher.
As many sources reported, the Fed will now embark on a giant buyback exercise which will be worth $125 billion every day. This will total to a massive $2.5 trillion per month. Aimed at shoring up the US economy, this scheme is basically flooding the market with “new” dollars in what has become the biggest money printing experiment in the history of the United States.
The Treasury Secretary Steven Mnuchin already described the liquidity on offer to businesses and banks, labelling it as “almost unlimited.” In an interview that he had with CBS on Sunday, the president of the Federal Reserve Bank of Minneapolis Neel Kashkari said:
“There is an infinite amount of cash in the Federal Reserve. We will do whatever we need to do to make sure there’s enough cash in the banking system.”
This is why the Bitcoin price eyeing new levels is not something that is new to the markets. According to the analyst named PlanB (which is also the creator of the Bitcoin stock to flow model), the Fed’s actions are basically the “central bank going full Zimbabwe.”
At press time, the price of Bitcoin (BTC) is at $6,716 with a 14% gain on the day.
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