Tomiwabold Olajide
Jerome Powell has issued an important message that will have a major impact on the cryptocurrency market.
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Federal Reserve Chairman Jerome Powell issued an important message that will have major implications for the cryptocurrency market.
Powell spoke on a panel that included European Central Bank President Christine Lagarde and Brazilian Central Bank Governor Roberto Campos Neto.
Powell said the Fed has made “substantial progress” in the ongoing fight against inflation, but stressed that it needs further evidence of sustained progress before considering cutting interest rates.
The comments come as markets are closely watching the Fed as inflation slows and other central banks, such as the ECB, have begun to gradually cut interest rates.
Investors had been expecting at least six quarter-point rate cuts from the Fed at the start of the year, and the market has since adjusted to reflect two more cuts, one in September and one before the end of the year.
Cryptocurrency Market Reacts
Powell's comments are of particular interest to the cryptocurrency market, known for its sensitivity to macroeconomic indicators. Bitcoin fell 3.36% over the past 24 hours to $60,349.
Several cryptocurrencies are also trading in the red, with losses ranging from 2% to 13%. Sentiment appears to have worsened following Powell's comments on the economy.
Markets are still estimating the likelihood of a rate cut at the September Federal Open Market Committee (FOMC) meeting to be around 65%, but that is declining slightly.
Regarding Bitcoin price action, according to Glassnode, a drop below $58,000 to $60,000 would see a significant number of short-term holders (STH) lose funds and cause the cryptocurrency to trade below the 200-day moving average. Price action between $60,000 and $64,000 would continue the current sideways pattern of market hesitation.
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Tomiwabold Olajide
