Why Bitcoin price reached 6-week high 21k?

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The price of bitcoin has been ranging between high 18k and low 19k over the crypto winter. But as of the time of this writing, Bitcoin had risen 3.25% in a single day, reaching a 6-week high of $21008.12 on Wednesday. So, what are the root causes? A number of variables, such as the Bank of Canada's (BoC) unexpected interest rate increase and the US's weaker-than-expected new home sales performance, have an impact on the price of BTC and ETH.

BTC/USDT Price: 1H (Source: TradingView)
 

Following rises of 75 basis points in September and 100 basis points in July of this year, people predicted another 75-point increase in interest rates. The Bank of Canada surprisingly only increases interest rates by 50 basis points, to 3.75%. The bank stated that there are some concerns over the rate of economic expansion and that in order to tighten monetary policy, supply issues must be resolved and demand must be reduced.

Shortly after the Bank of Canada raised interest rates in September, the US Census Bureau reported a 10.9% fall in new home sales. This is because the cost of mortgages has gone up due to the significantly higher interest rates, making housing less affordable for first-time purchasers.

These subpar economic indicators may have an impact on the Federal Reserve's decision to halt the tightening of monetary policy. In other words, this might be a sign of a future bullish trend for Bitcoin (BTC). Pairs make for better decisions. The second-largest cryptocurrency by market cap, Ether (ETH), has grown even more this week and is already almost at $1600 after rising 6.38% in a single day.

Final Reflections

I think it is difficult to deal with excessive inflation without slowing the economy. Is now the right moment to invest in bitcoin and ether? I'm not sure, I'll be honest. Actually, everything is dependent on what central banks decide. Do they wish to resolve the inflation issue permanently? Despite the fact that the market is down and many people are having problems obtaining work. On the other hand, inflation would grow if they chose not to implement a strict monetary policy, depreciating currencies and damaging the economy.