On December 1st, Bitcoin surged to a remarkable milestone, reaching $39,000 for the first time since mid-2022.
This surge was triggered by the United States Federal Reserve’s signals of potential policy easing. Data from Cointelegraph Markets Pro and TradingView confirmed this surge, marking a new 19-month high for Bitcoin on Bitstamp.
The catalyst for this bullish movement was Federal Reserve Chair Jerome Powell’s scheduled appearance at Spelman College in Atlanta, Georgia.
Powell approached the stage with a cautious tone but made it clear that the Federal Open Market Committee (FOMC) was committed to reducing inflation to 2% over time and maintaining a restrictive policy until they were confident about achieving this objective.
Powell stated, “It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease.”
Despite Powell’s caution, his comments on the state of the U.S. economy and efforts to curb inflation boosted risk asset sentiment.
Some analysts, like The Kobeissi Letter, remained skeptical about the Fed’s future actions, suggesting that the Fed would prefer a mild recession over the risk of inflation resurgence, implying a prolonged pause in policy adjustments.
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Bitcoin, however, seized the opportunity and reacted positively, in contrast to its relatively flat response to earlier U.S. macroeconomic data releases.
The next FOMC meeting, scheduled for mid-December, will be closely watched for any announcements regarding interest rate changes.
Market expectations, as of December 1st, heavily favored a pause in interest rate hikes according to CME Group’s FedWatch Tool.
In the Bitcoin market, trader Daan Crypto Trades highlighted the significant sell-side liquidity that played a role in the brief ascent to $39,000.
Keith Alan of Material Indicators shared an order book snapshot, revealing substantial resistance at $39,000 and $39,200, with notable buyer support at $38,000.
Traders and analysts in the crypto community expressed optimism about Bitcoin’s prospects.
BitQuant predicted a daily close above $38,000, which would be a powerful bullish signal, while Crypto Ed anticipated further upside potential, targeting at least $39,200 in the near term.
In summary, Bitcoin’s surge to $39,000 on December 1st was driven by the Federal Reserve’s signals of potential policy easing, despite Chairman Powell’s cautious remarks.
Market sentiment leaned towards a pause in interest rate hikes, and Bitcoin traders and analysts remained bullish on its future price prospects.
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