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Fed’s Jerome Powell Sends Crucial Message to Crypto Markets
Tom Wabold Olajide
Jerome Powell delivered a crucial message that has significant implications for cryptocurrency markets
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Federal Reserve Chairman Jerome Powell delivered a crucial message that has significant implications for cryptocurrency markets.
Powell spoke at a debate that also included European Central Bank President Christine Lagarde and Brazilian Central Bank Governor Roberto Campos Neto.
Powell said that the Federal Reserve has made “quite a bit of progress” in its ongoing fight against inflation. However, Powell stressed that more evidence of sustained progress is needed before considering any interest rate cuts.
The comments come as markets are keeping a close eye on the Fed, as inflation appears to be slowing and other central banks, such as the ECB, are starting to gradually lower interest rates.
At the start of this year, investors had expected at least six Fed rate cuts of a quarter point each. Market prices have been adjusted to reflect two drops, one in September and one before the end of the year.
Cryptocurrency market reacts
Cryptocurrency markets, known for their sensitivity to macroeconomic indicators, were particularly attentive to Powell’s statements. Bitcoin fell 3.36% in the past 24 hours to $60,349.
Several cryptocurrencies are also trading in the red, with losses ranging from 2% to 13%. After Powell’s remarks on the economy, sentiment seems to have worsened.
Markets have somewhat reduced the odds of a rate cut at the Fed’s September Federal Open Market Committee (FOMC) meeting, which remain around 65%.
Moving forward for Bitcoin price action, a break below $58,000-$60,000 would result in a significant amount of short-term holders (STH) losing money and trading below the 200-day moving average, according to Glassnode. Price activity between $60,000 and $64,000 continues the market’s current hesitation sideways pattern.
About the author
Tom Wabold Olajide
Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and trading forecasts on estimated market trends. Tomiwabold holds a bachelor’s degree from the University of Lagos.