- Bitcoin surged to a two-week high of $87,500 as traders speculated on a major US crypto policy update and reacted to the Fed’s dovish stance.
- Markets are now eyeing a potential announcement from Trump that could further influence BTC’s trajectory.
Bitcoin (BTC) soared to two-week highs on March 20 as traders speculated on a potential major announcement regarding US crypto policy. Combined with Federal Reserve Chair Jerome Powell’s comments on monetary policy, market sentiment turned bullish, pushing BTC toward $87,500 before settling near $86,000.
Fed’s Powell Sparks Optimism in Crypto and Stocks
The Federal Reserve’s latest meeting brought relief to risk assets, including Bitcoin, as policymakers decided to maintain interest rates at current levels. Powell confirmed expectations of two rate cuts by the end of 2025, emphasizing that inflation had “eased significantly.”
“We do not need to be in a hurry to adjust our policy stance, and we are well positioned to wait for greater clarity,” Powell stated.
This cautious approach lifted market sentiment, sending US stocks higher. The S&P 500 gained 1% on March 20, adding $500 billion in market capitalization. Former BitMEX CEO Arthur Hayes noted that the Fed’s stance signaled an opportune time for traders to increase risk exposure.
“JAYPOW delivered, QT basically over Apr 1,” Hayes commented on X, referring to the shift from quantitative tightening (QT) toward a more accommodative stance.
Trump’s Potential Crypto Announcement Fuels Speculation
While macroeconomic factors provided a strong foundation for Bitcoin’s rally, traders were even more focused on a rumored update from former President Donald Trump regarding his crypto strategy. Speculation swirled that a significant announcement could come as soon as March 21.
“This would be his first major update since March 6, when the national crypto reserve was established,” noted The Kobeissi Letter.
Although Trump’s previous executive order to create a Strategic Bitcoin Reserve had limited market impact, traders are now watching closely for any policy shift that could directly influence BTC demand.
Bitcoin Eyes Breakout as Bulls Regain Control
With Bitcoin closing above key resistance levels, bullish momentum appears to be returning. Popular trader Rekt Capital highlighted that BTC only needs an additional 8% rally to break out of its current range and end the recent downside correction.
As markets anticipate potential crypto-friendly developments from Trump, along with a supportive macroeconomic backdrop, Bitcoin’s next move could be crucial in determining its trajectory for the coming weeks.
