Slight change in US monetary policy sends BTC price and BTC hashrate to green territory

Published date: 10/10/2019

Yesterday, BTCUSD broke the 7700-8500 consolidation region, with traders now looking towards the next resistance at 9100-9500. The last daily candle closed bullish engulfing right above the 8531 resistance. Interestingly, the breakout occurred almost at the same time as the FOMC minutes release. 

The FOMC minutes are an important event inside the financial world, as it includes all the comments, projections, and fears of the policy members in charge of determining the path of the American economy.  The summary of the last FED meeting was not very positive, in fact, the minutes revealed that some officials are predicting a medium-term (and not long-term) recession. Policymakers also agreed on another 25bps cut in interest rates and expressed their concerns over the consequences of the trade war.  

Even though the American economy remains overall strong, the small pictures are starting to show weakness in investment, factories, and exports. The FOMC minutes and the speech given by Powell this week is addressing the weakness by slightly changing the direction of the US monetary policy towards the use of a tool called “Quantitative easing”. The Chairman of the Federal Reserve emphasized that the US will expand its balance sheet soon, meaning that the measure will be impacting US general reserves. 

New monetary strategies such as changing the level of reserve balances and consider the standing repo facilities are huge changes in the panorama… that's why it was not a surprise to see BTC and GOLD spiking yesterday massively. 

BTC hash rate rose once again, sending the asset to green territory the last bloodbath. At the time of writing, BTCUSD is trading at 8526USD (5% up in the last 24hours), while other safe-haven assets such as XAUUSD even gained over 1% in less than a night.  This only shows us the power that the crypto market currently has in situations of uncertainty and global risk. Overall, the Cryptonary team is looking for more confluences to enter long in BTC in the next couple of hours (taking into account that in the next FED meeting, Jerome Powell is very likely to cut rates again). 


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