Market Fearless After Fed Chairman’s Speech

Bull market and rare buy signal

Over the past day, Bitcoin has risen slightly to $42,700. The whole crypto market is mostly up slightly.

The US stock market was also covered in green after many dropping sessions. The stock futures market has grown similarly.

The increase in BTC also causes liquidation of futures orders, mainly Short orders, but with low value. However, the number of leveraged orders in the market is still high and shows no sign of decreasing. The Funding Rate Index is still around 0.

This Friday is also waiting for the weekly option expiration. The amount of liquidation option orders is low, so the impact is not high. Max pain price this time is 44,000 USD.

Bitcoin is still withdrawn from the exchange more than deposited. Yesterday, the amount of BTC withdrawn from the exchange was much higher than the amount deposited on the exchange.

Ethereum yesterday had a slightly higher amount of deposits to the exchange than the amount withdrawn from the exchange. In the previous days, ETH was generally withdrawn from the exchange more than deposited.

Another chart shared by on-chain data analyst will clemente suggests that the market presented a buy signal that is very rare in BTC history. Bitcoin Entity Index – Adjusted Dormancy Flow (yellow line) is calculated as the quotient of total BTC capitalization relative to the total capitalization of BTCs that have not moved (long-term storage). When this indicator enters the green zone (below) it is a good sign to buy BTC. The last sign is only the 6th time since BTC was born.

One group of institutions that are long-term storage of BTC are miners. Miners are the people who supply BTC to the market. However, for a long time, miners have continued to store and have not seen strong signs of selling. So the current reality is that the BTC supply is not increasing.

Fed President discusses inflation, unemployment and crypto

Fed Chairman Jerome Powell has appeared at a Senate hearing to be re-elected for a second term. Mr. Powell made the comments during a confirmation hearing in which key senators said they would support him for a second term. Most likely, Chairman Powell will continue to be the Fed chair in the next term.

During his confirmation hearing before the US Senate Banking, Housing and Urban Affairs Committee, Mr. Powell said he expected a series of rate hikes this year (three), along with other another reduction in the special assistance the Fed has provided during the pandemic. He also explained that current inflation is a temporary situation and inflation is not caused by money printing. Inflation is said to come mostly from the supply and demand of goods that are congested due to the epidemic. Currently, restrictions in import and export cause a shortage of raw materials and goods for production, and supply decreases, so prices increase. Therefore, raising interest rates is necessary and should be viewed on the positive side because this is the right thing to do in a recovering economy. Mr. Powell also believes that the epidemic situation will also gradually decrease. The unemployment rate is very low and the market is gradually improving.

Besides, Chairman Jerome Powell also mentioned stablecoins and CBDCs. He said that a crypto-related Fed research paper will be published in the next few weeks. In the research paper will be related to both crypto and CBDC, give some comments and get more people’s contribution about crypto. Regarding if the US issues a CBDC, Chairman Powell suggested that both CBDCs and stablecoins could coexist, without the former replacing the latter. His attitude towards crypto and stablecoins has been much more positive than in the past. Through the hearing, it was also found that many members of the US Congress have sympathy and support for crypto. This is a good signal for the future crypto development of the market.

Some other information:

• This past January 11th was the anniversary of the first Bitcoin transaction made. The first recipient of 50 BTC in this transaction from Satoshi was Harold Thomas Finney II.

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  The Central Bank of Iran, or CBI, and the Ministry of Commerce have reached an agreement to link CBI’s payment platform with a commercial system that allows businesses to pay with cryptocurrencies, the Mehr News Agency reported today. Monday. Alireza Peyman-Pak, Iran’s Deputy Minister of Industry, Mines and Trade, said that the new payment mechanism is expected to be finalized “within the next two weeks”.

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• The International Monetary Fund (IMF) has stated that the growing correlation between the cryptocurrency sector and the stock market eliminates the status of digital currencies as an investment vehicle. In a blog post, the agency emphasized that with correlation, crypto market volatility could spill over into equities, in turn threatening financial stability. The IMF has repeatedly given reasons not to support BTC because of concerns that BTC and crypto reduce the value of USD and fiat money in general.

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• Read moreBank of Japan prepares to test CBDC

  The long-awaited launch date has dawned, as Moonbeam, an Ethereum-compatible smart contract parachain, has gone live on Polkadot. With the launch completed, the second place auction winner becomes the first company fully operational on Polkadot – ready to welcome the rollout of more than 80 projects.

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