Bitcoin price soars to $22,000 as institutional demand rises
The price of digital currencies soared overnight as optimism about institutional demand rose. This is after One River Asset Management joined forces with Brevan Howard to invest more than $600 million into Bitcoin. Other large investors like Ark Invest and MassMutual have also invested millions in Bitcoin. Similarly, companies like PayPal and Square have bought a substantial number of coins. Ethereum price also rallied after CME announced that it would unveil ETH futures contracts in 2021.
The US dollar continued its downward trend after the Fed delivered its final interest rate decision of the year. As widely expected, the bank left interest rates between 0% and 0.25%. It also committed to continuing buying bonds until the economy gets back on track, implying a low unemployment rate and stable inflation. This means that the bank will continue buying at least $120 billion worth of bonds per month in the foreseeable future. The Fed expects the economy to contract by 2.4% this year and then bounce by 4.2% in 2021.
The price of crude oil rose in overnight trading after some encouraging inventories data from the United States. In a report, the Energy Information Administration (EIA) said that total inventories fell by more than 3.13 million barrels last week. That's after they increased by more than 15 million in the previous year. The number was also better than the expected decrease of 1.5 million barrels. Further, the price increased because of the rising hopes of a stimulus deal in the US.
The EUR/USD pair rose to an intraday high of 1.2211 after the FOMC decision. On the four-hour chart, the price has moved above the short and longer-term moving averages. It is also at the same level as the upper line of the Bollinger Bands. Similarly, the RSI and stochastic oscillator have moved above the overbought level. Therefore, the pair will possibly continue rising as bulls aim for the next psychological level of 1.2250.
The BTC/USD pair rose to an all-time high of 21,956 as optimism about the future of the digital currency rose. On the daily chart, the price has moved above all moving averages. Similarly, the momentum indicator, RSI, and accumulation/distribution have all continued to rise. After comfortably breaking out past 20,000, the next main target to watch will be the psychological level of 25,000.
The ETH/USD price soared to a three-year high of 646 in overnight trading. On the daily chart, the pair has also moved above all moving averages and is along the upper side of the Donchian channels. The RSI has also moved above the overbought level while the momentum oscillator is also rising. Therefore, the pair will likely continue rising, with the next main target to watch being 700.