Bitcoin price rises as Fed inflation session sends DXY to a 2-month high

585
SHARES
3.2k
VIEWS

Bitcoin (BTC) stayed below $ 40,000 on June 17 as a rising US dollar added downward pressure on BTC price.

BTC / USD 1-hour candle chart (Bitstamp). Source: TradingView

BTC / USD jumps at $ 38,000

Data from Cointelegraph Markets Pro and TradingView showed that BTC / USD trading was around $ 39,300 on Thursday.

You might also like

The largest cryptocurrency fell during a meeting of the Federal Reserve the previous day in which chairman Jerome Powell admitted that inflation could be higher than planned in the short term. As reported by Cointelegraph, the May Consumer Price Index (CPI) showed that inflation hit a 13-year high last month.

Although Powell has traditionally been a boon to Bitcoin, Powell’s confidence in the long-term normalization of inflation ultimately helped strengthen the dollar more strongly than BTC.

“Yes, they are anchored and in a good place right now – it’s gratifying to see that they are out of their pandemic lows,” Powell said in subsequent media comments on inflation indicators.

“In our new framework, it is essential to ensure that longer-term inflation expectations are anchored in a place that is consistent with our objective.”

That target is currently around 2%, with the Fed acknowledging that there would be periods when interest rates would exceed this threshold.

The dollar gained following the session, with the US dollar currency index (DXY) climbing to two-month highs.

This is a classic friction factor for Bitcoin, and the already subdued sentiment regarding the prospects for the bull run of 2021 has been re-tested.

1-day candlestick chart of the US Dollar Currency Index (DXY). Source: TradingView

Small futures gap offers possible target

Still popular trader Crypto Ed noticed the positive effects of BTC / USD bouncing off the USD 38,000 support at its intraday lows.

Related: Pantera CEO: The “panic” of the crypto market is subsiding, now is the time to buy

“Let’s not forget the potential extension to fill the CME gap,” he added as part of the comments on the low, with the futures gap – another popular short-term price influencer – standing at $ 37,000.

At the same time, business colleague Peter Brandt has highlighted a series of gaps that remain unfilled in BTC / USD, adding that he doesn’t believe that all of the gaps need to be filled.

CME Bitcoin Futures 1-day chart showing the June 13th gap. Source: TradingView

Previously, Cointelegraph reported on the changing habits of Bitcoin investors during this long period of low prices.

Hodlers store coins longer, and even those who bought in the early months of the bull market remain determined not to sell, data shows.