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September 23, 2020
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Additional Fed stimulus fuels gold and Bitcoin momentum

Fed already carried out several stimuli in the United States economy in 2020

This morning, the Federal Reserve (Fed) president addressed the world via a webcast and revealed that the United States is likely to face a “prolonged period” of low economic growth and income as the world recovers from the impact of the lockdown. .

Powell says that while the United States’ response has been “swift and vigorous”, previous stimulus packages and those planned for the future will take time to gain momentum. The Fed presidency is also encouraging consumer spending to combat any further economic downturn and has promised that the Fed would use more of its power to print money, if necessary.

While stimulus efforts that take time to gain momentum can be challenging for the Fed and the U.S. economy, it is a boon for safe haven assets such as gold and Bitcoin, which have recently reached fundamental resistance levels.

Both assets have a limited supply, making them “hard assets” ideal for capital to be stored during periods of inflation. And with more money being printed to avoid further economic recession, gold and Bitcoin are expected to show their true value in the coming months.

Economic transformation and inflation due to stimulus could lead Bitcoin and gold to new historical highs (ATH)

Bitcoin and gold, however, are dealing with critical resistance to overload, preventing them from recovering further, despite the turmoil the economy is facing.

Stimulus checks are moving towards assets, but making profits at these key levels after a sharp rise in the past two years is keeping prices under control and preventing a further escape.

Gold is facing the old resistance of the all-time high trading ranges, defined at the height of the last recession. At that time, gold prices skyrocketed to a peak of $ 1,900. Now, analysts are anticipating that the precious metal will reach prices of $ 2,000 to $ 3,000 an ounce, before a further retraction in the middle of the year.

Bitcoin, however, is trading at just over $ 9,000, after some attempts to breach $ 10,000 over 2020 so far. The asset recently went through its “halving”, which made the already scarce offer even more reduced.

The latest news from Powell and the Fed may have the potential to push these assets beyond those hard-to-break resistance levels, tending to set new all-time highs.

Source: Bitcoinist

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