Bitcoin Price Jumps Above $10,300 as the Fed Chairman Discloses that they are “working hard” on a Digital Dollar

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Bitcoin has broken $10,000 level yet again. In an abrupt move, BTC moved over $580 in under an hour, going as high as $10,380 on Bitstamp.

The whole market has taken to flying with the alt season in full force.

Libra “lit a fire” under Fed’s work towards Digital Dollar

In the meanwhile, Federal Reserve Chairman made a revelation that the US is indeed “working hard” on a digital dollar.

Fed Chairman Jerome Powell appeared before the House Committee on Finance Services on Tuesday as part of his semiannual testimony to Congress where on the topic of a central bank digital currency or CBDC he said,

“We’re working hard on it, we have a lot of projects going on, lot of efforts going on on that right now.”

He also came in support of private currencies when asked about China’s digital yuan.

https://twitter.com/APompliano/status/1227274625186435073

He further shared that it was social media giant Facebook’s Libra that “really lit a fire” under its work towards the CBDC.

“It was a bit of a wakeup call that this is coming fast, and could come in a way that is quite, you know, widespread and systemically important fairly quickly if you use one of these big tech networks like Libra did,” he said.

However, the Fed is not creating or launching the digital dollar yet as he said, “We should understand benefits and tradeoffs.” They are currently working out the issues related to cyber, privacy and others “thoroughly and responsibly.”

The positive news came after the US Treasury Secretary Steven Mnuchin said in December that he and Powell discussed the central bank digital currency but didn’t see the need for one in the next five years.

Bitcoin Price Not “Overbought”

Looks like, this has got the buyers jumping into Bitcoin. Whether the Fed’s positive remarks or just bitcoin being bitcoin, the market is surging.

Also, crypto data provider Glassnode found that “Historically, when Bitcoin has approached local or global tops, we’ve seen increased deposits to exchanges as investors look to sell (but) not this time – there’s no indication that $BTC is overvalued.”

Glassnode’s observation came in contrast with Bloomberg’s that noted yesterday that “the token is overbought based on the 14-day relative strength index (RSI),” which has crossed the 70 mark.

“It’s a consolidating bull market,” said Mike McGlone, an analyst with Bloomberg Intelligence. “Volume and open interest in futures, and on-chain addresses used, are primary Bitcoin-adoption metrics that have soundly increased vs. a month ago, supporting price appreciation. The next key story for the benchmark crypto will be its bid to exit the $8,000-$10,000 range.”

Just like McGlone, Bitcoin is expected to range by Rob Sluymer of Fundstrat Global Advisors whose target is $10,000 to $11,000 till the second quarter.

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