Bitcoin crosses $105.5k level as fears over Fed policy fade

WASHINGTON: Bitcoin began Monday’s trading session in the green, with initial volatility seeing it dip to $103,429 after closing Wednesday’s trade at $103,776.

However, this was the only drop in the first hour, as it quickly rebounded, rising by $643.1 to reach $104,419.10 around 1:33 UTC. The most significant price movement occurred at 6:13 UTC, when Bitcoin surged by $1,750.1 to hit $105,526.10.

Despite fluctuations throughout the day, Bitcoin stayed close to this level but did not surpass it as of 10:05 UTC, with the highest point being $105,494.70 at 9:57 UTC.

On Wednesday, Bitcoin (BTC) crossed the $105,000 mark following a shift in investor sentiment after the Federal Reserve paused its interest rate cuts.

Although Bitcoin initially fell to $101,800 after the announcement, it quickly rebounded, marking its highest level in three days. The Federal Open Market Committee’s decision left the benchmark interest rate unchanged, maintaining it within the target range of 4.25 per cent to 4.50 per cent.

Since the November election victory of President Donald Trump, Bitcoin has gained over 50 per cent, partly driven by expectations of more crypto-friendly policies.

Bitwise’s Chief Investment Officer, Matt Hougan, suggested that Trump’s recent executive order on cryptocurrencies could disrupt the usual 4-year boom-and-bust cycle in the crypto market.

In a research note on 29 January, Hougan highlighted the bullish nature of the order, which may positively impact the market.

However, Hougan also warned of “early signs of excess” in the crypto space, pointing to several companies using debt to raise capital for Bitcoin purchases. While he acknowledged there is nothing inherently wrong with this, he cautioned that introducing leverage could add risk to the market.

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