*Bitcoin Drops* Speaking in Jackson Hole, the Fed chair reiterated his commitment to maintaining tight financial conditions, including the option of raising interest rates further if necessary.
As investors processed U.S. Federal Reserve Chair Jerome Powell’s sustained commitment to managing inflation, including raising interest rates further if necessary, Bitcoin drops below $26,000 on Friday.
Following Powell’s statements at the annual Jackson Hole Symposium of the Kansas City Fed, stock and bond prices likewise fluctuated before turning slightly higher in the late morning. The U.S. two-year Treasury yield spiked briefly to a nearly 17-year high of 5.10% before falling a few basis points. According to the CME FedWatch Tool, investors currently predict that higher fed fund rates will occur by mid-November with a 54.5% likelihood.
BTC originally declined as well, falling from roughly $26,100 before the Powell speech to $25,800. At the time of publication, the cost had increased to about $25,900.
With the CoinDesk Market Index (CMI) down by 0.5%, the larger crypto markets are losing ground to bTC.
What will happen to the price of Bitcoin after that?
“BTC has been trading as a risk-on asset and is therefore subject to macro pressures,” Sacha Ghebali, director of strategy at digital asset data provider The Tie, said in an interview with CoinDesk TV on Friday morning.
BTC has been trading at approximately $26,000 for the majority of the week, falling below the 200-day moving average for the first time since January.
According to Ghebali, historically, BTC falling below its 200-day average has been associated with a bear market. “The market might still be processing last week’s sell-off,”
The prospective approval of a spot bitcoin ETF, for example, is a catalyst that might drive cryptocurrency values higher, he continued. High hopes for the new wave of applications, which included one from BlackRock, could be an “overreaction,” Ghebali cautioned.
Following its breakdown from the uptrend over the first half of the year, the market may take a break and continue chopping at present levels in the absence of an urgent stimulus, noted Rachel Lin, CEO of derivatives decentralized exchange SynFutures, in an email.
BTC and the larger crypto market may have just begun a moment of consolidation and might soon resume their climb, according to Lin. “As we can see from the current BTC chart, a ranging pattern has developed, with 25,000 serving as the lower limit and 31,500 as the upper limit. The market’s course for the upcoming months could be determined by a persistent break on either side of this range.