There is a growing disconnect between the movements of the stock market rally and Bitcoin lately. The fear of the second wave of infections from the COVID-19 kept rising.
The Dow Jones opened low today, and at the time of publication of this article, it was down by 160 points. The NASDAQ ended its three-day rally.
Following the US Fed Reserve’s announcement BTCUSD is on the rise
The US Federal Reserve chairman, Jerome Powell, announced that the negative interest rates in place would continue to operate. And the current ‘uncertain times‘ are indeed a cause of worry to the economy. And obviously, Dow Futures and Dow Jones fell following the announcement.
Source: TradingView.com
However, if we take a look at the fifteen-minute BTCUSD timeframe, we can see a sharp spike. This stark disconnect between the stock markets and Bitcoin, although surprising, is not unusual.
US Federal Reserve has the authority to print as many dollars as they feel necessary. Currently, that is what the Fed Reserve is doing to infuse liquidity into the economy.
It definitely creates an abundance of currency in the economy. However, it creates a situation of hyperinflation in the medium term. And that is where Bitcoin plays an important part. Presumably, BTCUSD can be used as a hedge against potential hyperinflation.
Bitcoin jumped vigorously following Donald Trump’s tweet
US President Donald Trump tweeted that,
“As long as other countries are receiving the benefits of Negative Rates, the USA should also accept the “GIFT.” Big numbers!“
Following this tweet, BTCUSD rose towards the upper spectrum of the Bollinger bands. An expanding Bollinger band is an indication of the rise in volatility. This push might be the kick Bitcoin investors were waiting for so keenly!
