After dipping below an exchange price of $5,700 on March 23, Bitcoin experienced an immediate rebound just as Wall Street entered its after-hours trading period. Major benchmarks such as the Down Jones Industrial Average and the S&P 500 posted dismal numbers as the United States Congress could not agree on a massive economic bailout package, but comments made by Federal Reserve Bank officials were certainly welcomed by investors on Tuesday.
The Fed is ready to implement every measure necessary to bring relief to the American economy after the massive reduction of productivity caused by the COVID-19 pandemic. Interest rates will be kept low, emergency loans can be made, cash payments can be distributed, and there is always the scenario of purchasing corporate bonds if the need arises. The announcement of all these quantitative easing measures brought cheer to Wall Street investors, and the optimism was contagious enough to spread to the cryptocurrency markets.
By the time Wall Street traders took their lunch breaks on Tuesday, Bitcoin was in the midst of a recovery that brought it closer to $6,600, which represents an improvement of more than 5% on a 24-hour basis. Bitcoin traders who follow technical analysis charts believed that the token was on track to reach $7,000 this week. It should be noted that the world's most valuable digital currency seems to be marching to the beat of Wall Street, and this is good news in terms of bringing much-needed stability to the markets.
More conservative analysts warned that both Wall Street and the cryptocurrency markets could be experiencing a spike caused by traders who "buy on the dip," meaning that they could easily turn back around and take profits once technical charts show a slight pullback. When this happens, volatility ensues and rallies are cut short.
As for fiat currencies, the U.S. dollar has been on a roll as it usually does when global recessions start. Other major currencies will probably adjust over the next few weeks, and this is when a bullish rally scenario for Bitcoin reaching the $10,000 mark once again will be more feasible.