Cryptocurrency investors may have felt discouraged by the lack of volatility in the summer months. But one should not overlook the fact that Bitcoin had a strong start to the year—gaining over 61% in the trading year.
Looking at the yearly returns of Bitcoin since 2010, only three years have seen negative returns. This suggests that buying the dip has paid off in the past, though the dips were quite significant.
Tomorrow the Federal Reserve of the United States (Fed) is expected to hold the funds rate steady. If the statement from the FOMC and the press conference reveal a dovish Fed, this would cause a weakening of the US dollar and a strengthening of Bitcoin.
The technical picture is also in favour of Bitcoin. The market has already bounced twice from $25k and is now trading above $27k. A dovish Fed could potentially push Bitcoin back up to the $30k resistance area and possibly even higher.
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Tags: Bitcoin, Fed, Strength, Dovish, US Dollar