Bitcoin (BTC) Spikes to Two-Week Highs on US Crypto Policy Rumors

Bitcoin (BTC) spiked to two-week highs on March 20 amid rumors that the US government was preparing a “major update” to its crypto policy.

Bitcoin (BTC) spiked to two-week highs on March 20 amid rumors that the US government was preparing a “major update” to its crypto policy.

BTC/USD 4-hour chart. Source: Cointelegraph/TradingView

Fed’s Powell injects relief into stocks, crypto

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching lows of nearly $87,500 on Bitstamp.

Now consolidating close to $86,000, Bitcoin benefitted from a fairly cool Federal Reserve meeting the day prior in which officials opted to hold interest rates at current levels.

Related: Bitcoin futures ‘deveraging’ wipes $10B open interest in 2 weeks

As policymakers confirmed that they envisaged two cuts by the end of 2025, Fed Chair Jerome Powell described inflation as having “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," he said in an opening statement before a press conference that followed the rates decision.

A “wait-and-see” approach was enough to relieve troubled risk assets, with Bitcoin joining US stocks in surging and finishing the day higher. The S&P 500 ended up by around 1% for the March 20 session, adding $500 billion in market cap.

Reacting, Arthur Hayes, former CEO of crypto exchange BitMEX, suggested that the Fed had delivered a key signal for traders to add risk.

"JAYPOW delivered, QT basically over Apr 1. The next thing we need to get bulled up for realz is either SLR exemption and or a restart of QE," he wrote in a characteristic X post, referring to officials rotating from quantitative tightening to quantitative easing.

S&P 500 1-day chart. Source: Cointelegraph/TradingView

Bitcoin traders eye US crypto announcement

For Bitcoin traders, however, the main focus remained on a potential change in US crypto posturing as whispers suggested that an announcement could come on March 21.

"This would be his first major update since March 6th, when the national crypto reserve was established," trading resource The Kobeissi Letter summarized in an X post on the topic.

When Trump signed an executive order to create a Strategic Bitcoin Reserve earlier this month, markets stayed surprisingly cool as it emerged that the plan would not necessarily involve the US buying BTC.

But with the latest daily close above key resistance trend lines, optimism was quickly returning.

"Bitcoin only needs to rally an additional +8% to position itself for a claim of the Range above and end this downside deviation," popular trader and analyst Rekt Capital noted. BTC price is still in i8ntputेर