The U.S. Federal Reserve is widely expected to hold interest rates steady at 1.5-1.75% on Wednesday.
Analysts at Goldman Sachs believe a hawkish surprise could come through in the form of board officials projecting one or two interest-rate hikes in 2020. That could bode well for the dollar.
The greenback could sell off if policymakers cite high inflation as a prerequisite for a rate hike, according to Goldman Sachs analysts.
Even so, Fed policy – whether hawkish or dovish – is unlikely to affect the price of bitcoin, which remains an uncorrelated asset, despite the popular narrative that it is a hedge against monetary and fiscal indiscipline.
In the past, the cryptocurrency has seldom benefited from monetary easing by major central banks.
For instance, the Fed's balance sheet has expanded by more than $290 billion since mid-September. Bitcoin, however, is down roughly 40 percent from the highs above $10,400 registered in mid-September.
The European Central Bank (ECB) cut rates by 10 basis points to - 0.50 percent and announced a fresh bond buying program in early September. Even so, bitcoin registered a monthly drop of 13.5 percent.
Monetary tightening cycles have also failed to influence bitcoin. For instance, the Fed raised rates nine times between 2015 and 2018, by 0.25 percentage point each time. Despite the rate hikes, the cryptocurrency charted a meteoric rise from $400 to $20,000 in 2.5-years to December 2017.
Many experts still believe unconventional monetary policies will bode well for bitcoin in the long run.
“Bitcoin is headed towards a unique situation – lower interest rates, more QE, and the [miners' reward] halving in 2020. These three events occurring near the same time should serve as rocket fuel for bitcoin over the next 2–3 years," Anthony Pompliano, founder and partner at Morgan Creek Digital Assets told CoinDesk in November. |
 
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Softer Tone Intact
BTC: Price: $7,300 | Market cap: $132 billion | 24-Hr Volume: $17.24 billion
Short-term trend: Bearish Bitcoin dropped 1.4 percent on Tuesday, reinforcing the bearish view put forward by the high-volume rejection above $7,600 over the weekend.
The daily chart indicators like the relative strength index and the MACD histogram continue to signal bearish conditions.
As a result, the cryptocurrency looks set for a deeper drop to $7,097 – the support of the 21-month exponential moving average (EMA). The EMA had acted as a strong support in the five months to October 2018.
A week ago, the technical line held ground resulting in a price bounce that fizzled out at highs above $7,660 on Dec. 9.
If the EMA continues to restrict losses, chart-driven buying could be seen, leading to a notable price bounce. That said, the short-term outlook will turn bullish only above $7,870.
Long-term trend: Neutral
Bitcoin's monthly MACD histogram has dropped below zero, signaling a bearish reversal. The cryptocurrency is trapped in a five-month bearish channel.
Even so, the outlook remains neutral, as the MACD is a lagging indicator. Further, the miners’ reward halving, usually a price-bullish event, is due in May 2020.
With BTC looking oversold after a 50 percent drop from June highs above $13,800, a notable recovery ahead of the supply-cutting event can’t be ruled out – more so, as the 50-week MA has crossed above the 100-week MA, confirming the first golden bull cross since May 2016.
After all, the previous bull cross had marked the start of a long-term bull market. The cryptocurrency picked up a strong bid near $430 following the bull cross confirmation in May 2016 and charted its way to a record high of around $20,000 in December 2017.
That said, the outlook as per the weekly chart would turn bullish only if and when prices break higher from the five-month long bearish channel.
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DigixDAO Rises On Chatter DGD : Price: $19.12 | MCAP: $38.2 million | 24-Hr Volume: $648,870
Short-term trend: Bullish DGD is today's best performing cryptocurrency in the top 100 at Messari.io.
The rise is likely due to recent chatter on Crypto Twitter over an interview with the co-founder of Bullionix on the motivation behind kickstarting via DigixDAO.
Digix is building a decentralized autonomous organization (DAO) for the governance of a network focused on tokenizing physical assets, including gold.
Short-term momentum has been building, as demonstrated by the daily awesome oscillator (AO). However, a deeper pullback from a series of lower highs to retest around $18.38 should not be ruled out.
Long-term trend: Cautiously bullish
On the technical long-term side of things, DGD broke through its 183-day downward sloping trendline on Nov. 29 creating a new range above former resistances, that had for so long, continued to hamper organic growth.
Prices are now firmly overbought so a period of profit-taking from savvy investors should not be ruled out, but with all things remaining constant DGD could see a continuation in value should buyers continue to enter the market amid strong bullish fundamentals.
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| | | Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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