The stock market has been enjoying a nice ride in 2021 after the pullback caused by pandemic concerns last week, but the Fed’s post-meeting statement and policy roadmap is sending a signal that the market has some room for growth. Traders of digital currencies digested the Federal Open Market Committee’s (FOMC) latest projection on economic growth with a positive attitude, particularly with regard to the current assessment of the labor market in the United States.
Along with other major cryptocurrency tokens, Bitcoin rallied shortly after the FOMC meeting. There are some bearish signals that suggest the overall market will soon drop in value, although Bitcoin in particular is being closely watched by investors for clues on its long-term movement.
Bitcoin (BTC) is not the only digital currency currently with any real value, but its technical indicators suggest that traders will not relent in their pursuit of a bullish market. As indicated in the Fed’s economic report, the U.S. central bank intends to raise interest rates three times in 2022, but the first rate hike will happen in January of next year, so there are still a few weeks left for traders to enter the market with long positions.
As for the possibility of a Santa Claus rally in the cryptocurrency markets, there is some reason to believe that this might happen before the year ends. Bitcoin, for example, went through a bullish rally for over eight months in 2019, with price rises being driven by the anticipation of a possible Fed rate hike. As of this writing, some market analysts believe the FOMC’s latest report on economic growth is a strong positive for Bitcoin’s prospects.
The market has started to gain traction on Bitcoin, indicating that traders are slowly gearing up for more long positions. There are some positive factors for the market that may encourage investors to enter the market, even though the market may not seem very bullish. While the recent sell-off brought to the market’s price has been painful for many investors, there is a reason for the downturn, although it may not last as long as short traders would hope for.