why next week will be crucial for investors

While the queen of cryptocurrencies is undergoing a strong correction, central bank meetings scheduled for next week will be closely followed by investors.

The price of bitcoin fell sharply on Friday, with some investors pocketing gains in the wake of its historic records, in an otherwise generally sluggish market pending the meetings of several central banks next week. Around 11:30 a.m. in Paris, the price of the digital token fell 4.22% to $67,694, after reaching a new historic high the day before at $73,797.

“After bitcoin reached historic highs almost every hour in recent days, investors (…) took profits, which contributes to a temporary drop in the price,” explained Nigel Green, head of the bitcoin firm. Devere council, interviewed by AFP.

He believes that bitcoin should continue to appreciate “as the halving event (or halving, a technical phenomenon which halves the reward granted to validate transactions, Editor’s note) approaches in April and while “institutional investors continue to invest in digital assets” since the introduction of a new type of investment, an index fund (ETF) indexed to the price of bitcoin.

“The downward correction can be partly attributed to the rebound of the dollar” on Thursday, adds James Harte, analyst at Tickmill.

He notes that investors tend to gravitate towards one or the other of these assets. The greenback initially rose on Thursday in reaction to an American inflation indicator, the producer price index (PPI), which came out higher than expected, dampening expectations of monetary easing by the American central bank (Fed). from June.

On Friday, the dollar fell slightly against the euro, which gained 0.10% to 1.0895 dollars, and lost a little ground against the pound, which gained 0.03% to 1.2757 dollars. Forex traders were waiting before the publication in the United States of industrial production figures in February and estimates of consumer confidence in March later in the session.

Fed meeting

The next meeting of the Fed Monetary Policy Committee (FOMC) is scheduled to take place next week, March 19-20.

“All eyes are on” this meeting, notes Ipek Ozkardeskaya, analyst at Swissquote, “knowing that it is always better for the Fed not to act too early rather than being forced to turn around midway through road”.

The Monetary Policy Committee (MPC) of the Bank of England (BoE) will make its decision next Thursday. In Japan, the first results of annual wage negotiations have resulted in a new record increase since 1991, which could prompt the Bank of Japan (BoJ) to begin a gradual process of monetary normalization from next week. The Japanese central bank will decide on this subject on Tuesday during its monetary policy meeting.