Bitcoin (BTC) experienced a significant increase on March 20, achieving a two-week peak amid speculations of a forthcoming major update in U.S. cryptocurrency regulations.
The BTC/USD pair soared to nearly $87,500 on Bitstamp and subsequently stabilized at around $86,000.
This surge aligns with a reassuring meeting of the Federal Reserve on March 19, where the decision to hold interest rates steady appeared to create a supportive environment for risk assets.
Federal Reserve Chair Jerome Powell indicated a substantial easing of inflation pressures, suggesting that there is no urgent need for a shift in monetary policies.
During his opening remarks, Powell pledged to seek further clarity before implementing any policy changes, a stance that was well-received by both cryptocurrency and stock markets.
On the same day, the S&P 500 saw a gain of approximately 1%, adding about $500 billion in market capitalization.
Arthur Hayes, the former CEO of cryptocurrency exchange BitMEX, suggested that the Fed has given a significant nod to the market, hinting at a move from quantitative tightening to easing, starting April 1.
However, Bitcoin investors are now keenly awaiting a potential announcement from the U.S. government, expected on March 21, concerning its cryptocurrency strategy.
Analysts, including those from The Kobeissi Letter, speculate that this update, which is President Trump’s first significant policy announcement since the creation of a national crypto reserve on March 6, could have profound impacts on the market.
Earlier in the month, President Trump enacted an executive order to establish a Strategic Bitcoin Reserve, a move met with cautious optimism as it did not immediately confirm U.S. purchases of BTC.
Yet, market sentiment remains hopeful as Bitcoin has breached key resistance levels. According to prominent trader Rekt Capital, Bitcoin needs just an 8% increase to reach higher price thresholds, indicating potential for further price gains.
With Bitcoin’s price already up 13% from last week’s lows, the current market dynamics, influenced by Federal Reserve policies and anticipated U.S. government announcements, present a cautiously optimistic outlook for traders looking to leverage these shifts.
