Bitcoin trades in a tight range amid tight monetary environment

Last Updated on September 27, 2021

Bitcoin price remained flat after hawkish Fed and Bank of England decisions, with the price of the currency in a tight range as investors reflect the relatively hawkish environment among the world’s largest central banks.

Bitcoin is under stricter measures

Bitcoin

The Bitcoin price stabilized during this week, as the week was relatively filled with decisions by major central banks, on Wednesday the Bank of Japan made a relatively moderate decision on interest rates, leaving interest rates and quantitative easing program at the same levels unchanged, on the same day, the Reserve Bank concluded The Fed held its meeting and seemed relatively hawkish, and also decided to leave the rates and quantitative easing policy as is without adding any changes.

However, in the accompanying statement, the bank said it expects a slight rise in interest rates between 2022 and 2024, and will also start ending QE purchases in 2022.

Elsewhere, in Norway, the Bank of Norway became the first major central bank to raise interest rates, as the bank raised rates from 0% to 0.25%, and other central banks that have made their decisions this week are the Swiss National Bank (SNB) and the South African Reserve Bank (SARB), the Central Bank of Brazil.

The decisions of central banks especially the Federal Reserve and the Bank of England are important to the price of the digital currency Bitcoin, historically, risky assets such as Bitcoin and Ethereum tend to perform well in the period of easy money policies.

For example, the bitcoin price did well in 2017 when the Fed maintained a dovish tone, then collapsed in 2018 when the Fed raised interest rates four times, and finally, the price started to recover in 2019 when the Fed started The Fed cut interest rates.

China declares all crypto transactions illegal

China is taking another major step against the cryptocurrency industry, by declaring all cryptocurrency transactions illegal. Users are no longer allowed to access even those digital exchanges that operate outside the country, and this new move is likely to cause significant amounts of capital to leave. Money for China and heading to Western countries.

For many years now, China has had a difficult relationship with the cryptocurrency industry, however, with the passage of time that relationship started to get worse, especially now that the country is about to issue its own cryptocurrency on a national scale, therefore, all cryptocurrencies should be phased out. The other, which may be a competition for the upcoming digital yuan.

Over the course of this year, the country has been removing miners from its country, the majority of bitcoin miners came to China due to the cheap electricity, and now its anti-crypto campaign has reached a new level as the country has officially made all crypto transactions illegal.

Professional Trader and Analyst, economist in Financial and Forex marketsince 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.
Mohammed Abdelkhalik

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