Over the past six months, bitcoin has significantly expanded its institutional audience due to the coronavirus crisis and worsening inflation. Small investors receive additional income from operations with bitcoin, and large capital uses the asset to hedge risks. The inflationary crisis has seriously intensified due to the Fed's stimulus program, which has become a catalyst for the growth of all markets. However, soon investment flows in BTC may decrease.
The main reason for this was the results of the next meeting of the Fed, where it was decided to launch the curtailment of the incentive program. According to representatives of the department, the reduction will occur by $ 15 billion monthly. Earlier, the Fed injected more than $ 120 billion a month into the economy by purchasing government bonds. Despite the negative nature of the news, which promises a drop in the indices in the long term, the markets welcomed the news, and the SPY index rose by almost a percentage. Bitcoin reacted less optimistically and sank by $ 3k, but then quickly recovered to the usual range of fluctuations of $ 60.5k - $ 63k. Most likely, the market was ready for such news and looked stable before the shock wave. Despite this, the inflation rate will slow down significantly after the gradual curtailment of the financing program, which will affect investors who will again turn to less volatile assets. Bitcoin will have to look for new ways to attract investment to keep the current interest. The NFT and Defi markets should be recognized as possible options for expanding the capabilities of bitcoin.
However, BTC has other advantages that can positively influence the price and the overall development of the coin ecosystem. We are talking about ETFs that have already been launched on the futures market. Previously, many crypto influencers stated that such a product would appear on the US spot market no earlier than 2022. Individuals of the United States government turned out to disagree with this position of the regulator and sent a letter to the chairman of the department demanding to allow the operation of a direct ETF for bitcoin. Among the main arguments of the policy stated the availability of cryptocurrencies for millions of investors in America and the relatively high volatility of futures ETFs. Whether these actions will affect the SEC's position will become clear very soon, because the regulator has at least 10 applications for launching exchange-traded funds on the spot market.
Meanwhile, bitcoin is trading at $ 61.8k. Negative news after the Fed meeting pushed the coin back to the lower part of the current range of fluctuations. The current price movement indicates the continuation of the consolidation period, which should take less time after today's local collapse. This is because the price has repeatedly tested most of the levels, and therefore it will take less time to overcome them. At the same time, strong market support is needed for buyers who continue to accumulate Bitcoin. Now the total reserves of coins in the hands of large investors are at an absolute maximum for 2021, which indicates the end of the accumulation period and the imminent exit from the fluctuation zone into the growth zone.
This is also indicated by the technical indicators of the cryptocurrency: the stochastic oscillator continues to move along an upward trajectory, and the relative strength index is in the bull market area, above the 40 mark, despite the prerequisites for a decline. At the same time, the MACD remains neutral, which indicates the continuation of the trend towards consolidation within the daily timeframe. Most likely, when crossing the lower range of the entire oscillation area, the crypt will try to make a powerful breakthrough by forming a large bullish candle. The likely starting point of the bullish rally may be the $ 62.7k mark.
