Cryptocurrency Markets Decline After Powell Led By Bitcoin

SAFAKNA TURKEY – Bitcoin fell below $22,000 yesterday after a hawkish speech by US Federal Reserve Chairman Jerome Powell.

Bitcoin, which rose about 40 percent in January, has regressed due to the events of recent days. When Fed Chairman Powell’s speech to the US Senate took on a hawkish tone, an upward trend in selling followed in bitcoin, ethereum, and altcoins.

Speaking before the US Senate Committee on Banking, Housing and Urban Affairs yesterday, Powell said the latest economic data came in stronger than expected, indicating that the final level of interest rates could be higher than expected.

EXIT FROM POWEL

Stressing that restoring price stability would likely require more restrictive monetary policy for a while, Powell said: “We are ready to accelerate the pace of rate hikes if the backbone of the data shows that faster tightening is needed.”

After Powell’s remarks, markets raised the likelihood of a 50 basis point Fed rate hike at this month’s meeting to 74 percent, and the estimate that the final interest rate could rise to 6 percent also strengthened.

Risk assets, especially stock markets and cryptocurrencies, plummeted as Powell’s comments raised the possibility that the Fed could return to significant rate hikes. While high interest rates have boosted dollar yields, anticipation has caused investors fleeing falling crypto assets and stock markets to turn to the safe-haven dollar.

LATEST SITUATION IN THE CRYPTO MARKETS

Bitcoin fell below 22k after Powell’s speech. Bitcoin was trading at 22k with a drop of nearly 2 percent this afternoon. Ethereum lost 0.7 percent to $1,556.

Altcoins, which started the day with a decline, also followed the leading cryptocurrencies. Dogecoin traded at $0.07317, down 1.5 percent, Cardano at $0.3246, down 1.34%, and Solana at $19.4, down 5 percent.

CRITICAL LEVELS IN BITCOIN

Bitay Research Analyst Betul Yavuz summed up the last 24 hours of the markets as follows:

“With Bitcoin breaking through $22,315, which is an important support level for yesterday, it is possible to test $21,850 again in a continuation of the downward movement. If it fails to hold at this level, 21,530 will become an important support level.

On the other hand, the $22,315 level is a critical resistance level. To continue the rise, it will be important to break this level and ensure its consistency. Then, $22,765 can be expected to be the next resistance level.”

“INTERESTING PLANS TURNED EMOTIONS INTO CARE”

Gate.io research manager Sevkan Dedeoglu also shared her assessments for February.

Dedeoglu said the enthusiasm experienced in the early days of the year turned to anxiety in February and said: “Signals from Fed officials that interest rate cuts will continue after higher-than-expected US inflation prompted forecasts made at the end of the year. 2022 to change.”

Dedeoglu said: “We see that the price of bitcoin is above the $20,000 level, which is considered a psychological limit, which entails an expectation of growth. Bitcoin falling below $20,000 could have a negative impact on alternative cryptocurrencies (altcoins).