Bitcoin Price Ignores $2.3T Fed Cash as Pundit Warns of ‘Sucker Rally’
Bitcoin (BTC) braved less volatile but choppy trading on April 9 as the United States Federal Reserve flooded markets with trillions in dollars.
Cryptocurrency market daily overview. Source: Coin360
Fed rolls out trillions in loans
Data from Coin360 and Cointelegraph Markets showed BTC/USD still keeping within a tight $400 corridor between $7,100 and $7,410 as the week continued.
A sudden dip to $7,110 formed the most volatile feature of the past 24 hours. At press time, Bitcoin traded at around $7,325.
Bitcoin 1-day price chart. Source: Coin360
The largest cryptocurrency appeared broadly unfazed by the announcement of a fresh stimulus package from the Fed worth $2.3 trillion.
In a press release, the central bank said that its aim was to “support the economy” as the U.S. coronavirus death toll reached 14,800.
Board Chair Jerome H. Powell said:
“The Fed’s role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible.”
The cash injection comes just weeks after a giant $6 trillion liquidity tsunami from the Fed, a sum so large that it equals the entire U.S. GDP from 1990. Earlier on Thursday, Cointelegraph reported that U.S. national debt was at a historic high of $24 trillion.
Commentator: BTC is staging a “sucker rally”
While markets were also buoyed by the potential for a cut in oil production after Thursday’s OPEC+ meeting, among Bitcoin analysts, the mood was overwhelmingly bearish.
Despite rising around 8% in a week, Bitcoin, like traditional markets, was unlikely to sustain its trajectory, Cointelegraph Markets’ Michaël van de Poppe warned.
“The price of $BTC is slowly grinding upwards, but volume is decreasing,” he wrote in a Twitter post on Thursday.
“The $6,900 shorters got stopped out & flipped long, while the $7,700–8,000 shorters are waiting. More and more people turning bullish, giving me indication that liquidity is beneath us. Let’s see.”
Popular commentator Looposhi was more damning, writing:
“I just think it’s cute how some of you about to burn their account over some textbook sh*t. Let me be very clear. THIS IS A #Bitcoin SUCKER RALLY!”
Meanwhile, U.S. jobless claims totaled over 6 million for a second week, van de Poppe agreeing with the International Monetary Fund, or IMF, that coronavirus would create the worst recession since the Great Depression of the 1930s.
By William Suberg