A nightly rally in the Bitcoin market was halted halfway when Donald Trump rejected a nearly $ 900 billion stimulus package that passed both the Democratic-controlled House of Representatives and the Republican-owned Senate.
The Bitcoin -to-dollar exchange rate slipped 1.13 percent to 23,554 dollars in the pre-European meeting on Wednesday. Traders worriedly reduced their exposure to the cryptocurrency, in the expectation that a delayed stimulus package would help the US dollar rebound. The greenback is trading above its two-year low.
A delayed law
Technically, Bitcoin’s price movement seemed choppy. The flagship cryptocurrency started the week in negative territory due to profit-taking.
It also crashed when news of a new coronavirus mutation led investors to the safety of the US dollar. Bitcoin coincided with global stocks and gold.
But on Tuesday the price reduced its previous weekly losses by rebounding 4.81 percent. The decline came as the U.S. Senate passed the $ 900 billion stimulus package that would provide crucial economic relief to American households and businesses affected by the COVID-19 pandemic.
Trump refused to sign the law, causing another extension in a bureaucratic process that has already taken months. The president said he would ask Congress to change the details – mostly to increase the direct payment from up to $ 600 to $ 2,000. The Speaker of the House of Representatives, Nanci Pelosi, agreed to this request.
„The Democrats are ready to get this down to the ground this week, with unanimous approval,“ she tweeted. „Let’s do it!“
What’s next for Bitcoin?
Recent moves in the Bitcoin market have trapped the price in a sideways consolidation area. It looks like a bull flag – a bullish continuation pattern that forms when an asset briefly interrupts its uptrend. Its typical result is an upward breakout, with the price increasing by as much as the previous flagpole.
The height of the flagpole is near $ 4,500. That means the best result from the current scope of consolidation is a breakout towards $ 28,500. So it appears that market fundamentals are supporting the upward bias.
Bitcoin adoption has reached a critical turning point with the arrival of institutional capital. Mainstream firms and investors are either buying Bitcoin or recommending their customers buy Bitcoin, given the global inflation outlook, compounded by soaring sovereign debt and budget deficits.
„After years of sleeping behind the wheel, institutional investors are now being shaken up en masse,“ said Cole Garner, an independent on-chain analyst. “If they want this asset, they have to work hard, compete with the crowd, and run FOMO through ATHs. And that against a background of scarcity that you have never experienced before. “
And that’s bullish through and through for Bitcoin.