US may accept negative interest rates

Bitcoin has completed a four-day losing trend and is trading steadily around $9,000 amid risingspeculation that the US may end up accepting negative interest rates.

The data showed the top cryptocurrency by market value rose nearly 3% on Tuesday, having suffered losses over the previous four days - its longest daily loss in two months.

Tuesday price rises coincide with new callUS President Donald Trump to negative interest rates. “While other countries benefit from negative tariffs, the US should also accept large numbers as a“ GIFT ”! - wrote Trump.

In accordance with the policy of negativeinterest rates (NIRP) banks must pay interest rates for storing free cash (excess above normal) with the central bank. In fact, commercial banks are punished for retaining excess cash in an attempt to force them to increase lending to enterprises and consumers.

However, countries like Japan, whichhave been pursuing a policy of negative interest rates since 2016, still do not observe steady growth rates and are still far from the target inflation rate. Europe also did not seem to be able to support growth with negative indicators, according to The Wall Street Journal.

Despite this, President Trump wantsnegative rates. Interest rate markets also play with the idea that the cost of borrowing in the US will be below zero. On Tuesday, stock index futures fell below zero, which means investors were expecting negative interest rates in June 2021.

Many cryptocurrency market analysts believe thatunconventional monetary policy, such as negative rates and large-scale asset purchases, is inflationary in nature and can be a good omen for bitcoins, which have limited supply and declining production over time.

Speaking at the conference, Sayfidyan Ammous, authorThe Bitcoin Standard, explained that the attractiveness of cryptocurrency is that its programmed monetary policy is superior to the reactive monetary policy of traditional central banks.

Indeed, traditional central banks inthey react by nature, as their position will change along with changes in the economy. This creates a lot of uncertainty. In contrast, Bitcoin's monetary policy is set at 21 million units, and supply is halved every four years. On Monday, Bitcoin received a third fee reduction, which fell from 12.5 BTC to 6.25 BTC.

While negative interest may bea good omen for bitcoins, currently Fed officials are not inclined to follow this path. For example, Richmond Fed President Thomas Barkin and Chicago Fed President Charles Evans recently opposed negative rates.

Chairman Powell is also expected to break up.hopes for rates below zero during his webcast with the Peterson Institute for International Economics today at around 9:00 am ET (13:00 UTC).

Although it is unlikely that if Powell shows willingness to consider negative bets in the future, Bitcoin could potentially find bids and rise above $ 9,000.

While prices rose on Tuesday, stillthere was no bullish continuation. The cryptocurrency has not yet received approval above $ 9,000 and is trading at around $ 8,930 at the time of printing, which represents a 1% increase per day.

Some observers expect bitcoins for now.will move sideways. “We expect that in the short term, consolidation will continue from $ 8,000 to $ 9,500. The implied volatility (IV) and trading volume fell sharply after halving, signaling that there was no direction for BTC, ”said Matthew Dibb, co-founder and chief operating officer of Stack, a provider of cryptocurrency trackers and index funds.

Daily trading volume of futures quotedon the Chicago Mercantile Exchange, on Tuesday fell 62% to $ 345 million, according to data provided by crypto derivatives research firm Skew. Estimated volatility fell sharply after halving, as discussed on Tuesday.

From the point of view of technical analysis, the path of least resistance seems to go down.

The 5-day moving average has moved below the 10-day moving average, indicating a bearish shift in the short-term trend.

The MACD histogram also turned bearishterritory below zero, as noted by popular analyst Scott Melker. This could be considered a warning of a fall in prices, as on the weekly chart it is supported by the “top” candle, which represents the buyer's fatigue.

On the other hand, the main support is onthe level of 8000 dollars (an average of 200 days). Going above a daily high of $ 9,183 can increase buyer pressure and open doors up to $ 10,000.

 

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