Bitcoin hovered between gains and losses as traders awaited further guidance from US Congress leaders on their next coronavirus aid package.
The benchmark cryptocurrency rose 0.07 percent to $ 22,843, suggesting it would consolidate sideways after hitting another record high of $ 23,677 on Thursday (data from Coinbase). Other top alternative cryptocurrencies, including Ethereum (ETH) and Ripple (XRP), also fluctuated.
Bitcoin holds a majority of its profits on Friday. Source: BTCUSD on TradingView.com
Bitcoin holds a majority of its gains on Friday. Source: BTCUSD on TradingView.com
Democratic and Republican leaders want to finalize a long-belated coronavirus stimulus bill as the US grapples with high coronavirus rates, new lockdowns and a sluggish economic recovery. The data released on Wednesday showed that the number of people applying for unemployment benefits has hit a three-month high.
Experts and market strategists believe the deteriorating market outlook has put pressure on US lawmakers to pass a new stimulus package at the earliest. The prospect of more liquidity in the economy, however, has brought the US dollar index down to its two-year low.
Bitcoin has soared nearly 20 percent this week due to weaker dollar sentiment. CNBC reported that mainstream investors are buying the cryptocurrency to reduce their exposure to the greenback. They see Bitcoin as an “inflation-protected wealth store”.
Bitcoin on the way to another ATH?
Bitcoin also consolidated on Friday as the US dollar tried to offset its losses. The greenback rebounded nearly 0.2 percent and still stayed on its way to suffer longer losses amid global anti-dollar sentiment. This also has to do with the announcement by the Federal Reserve that it will continue its quantitative easing programs.
“This week’s announcements are sure to add to the prospect of relaxed monetary conditions, and favorable risk-weighted assets performance, led by the Fed, will keep the US dollar on a weaker path,” MUFG analysts told Reuters.
#bitcoin> $ 20k by the end of the year, 88% probability! pic.twitter.com/XwENFohy2a
– Offset (@skewdotcom) December 18, 2020
With that in mind, Bitcoin could continue to behave as a safe haven for mainstream investors and companies now sitting on high cash reserves.