Crypto Experiences Tumultuous Week Amid Interesting Global Developments
Bitcoin (BTC) and other cryptocurrencies saw strong gains in late October, but now there seems to be a pause, raising concerns about a potential downturn. This might be due to profit-taking or a return to normalcy after the election of a new house speaker, where crypto was a key campaign topic. Tom Emmer won the Republican nomination for the position in late October.
Elsewhere, Andrew Bailey, Governor of the Bank of England (BoE), recently discussed the Monetary Policy Report and potential inflation concerns. He emphasizes the need for vigilance but not excessively prolonged restrictive policies, citing uncertainties due to events like the ongoing conflict in the Middle East affecting energy prices.
Bearish concerns yet bullish momentum
The crypto sentiment indicator is turning bearish, indicating caution among investors. Historical data suggests that when negative keywords increased, both Bitcoin and altcoins like Ether, Solana, XRP, Cardano, and Shiba Inu saw upward trends.
Despite the bearish sentiment, positive factors persist. CryptoQuant suggests optimism in the market. Additionally, the potential approval of a Bitcoin spot ETF could attract institutional investors and boost prices.
On another note, major stock indexes, including Nasdaq, rose on the back of the United States Federal Reserve deciding to keep interest rates unchanged. Fed Chair Jerome Powell commented on adopting a more cautious approach to rate hikes, making it less likely in the near term.
BoE discusses important updates
The Bank of England maintained the policy rate at 5.25%, as expected. The decision passed with a 6-3 vote, with several main constituents favoring a rate hike. In the policy statement, the BoE noted persistent upside inflation risks.
Key points in the aforementioned Monetary Policy Report include revised inflation forecasts, a slowdown in GDP, and wage growth estimates. The BoE aims to maintain a sufficiently restrictive bank rate for an extended period. The market reacted positively, with GBP/USD rising 0.55% to 1.2215 after the announcement.
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