Bitcoin Retreats to $100K After Powell’s Statements on BTC
- Bitcoin falls after Jerome Powell comments.
- Ethereum, XRP and other major cryptocurrencies are also facing losses.
- Fed rate cuts follow economic data.
The cryptocurrency scene experienced significant turbulence this week after Federal Reserve Chairman Jerome Powell announce interest rate adjustments and make cautious comments about the economic future. The revelation not only sent the US stock market tumbling but also had a direct impact on cryptocurrencies, including Bitcoin, Ethereum and Dogecoin.
Following a 25 basis point interest rate cut announced on Wednesday, Bitcoin has seen a significant drop, losing nearly 5% in the past 24 hours. Prior to the Fed’s press conference, the leading cryptocurrency had hit a new all-time high above $108.000 but quickly retreated to $100.400.
Other digital currencies have also seen dramatic declines. XRP has seen a 10% drop in value, while Dogecoin has fallen 9% to its lowest price of the month at $0,363. This movement reflects a risk-averse reaction on the part of investors, who have apparently retreated from both risky assets like stocks and cryptocurrencies.
Why is bitcoin falling today?
During the press conference, Powell clarified that the Federal Reserve does not have legal authorization to include Bitcoin or other cryptocurrencies on its balance sheet, ruling out any possibility of legislative change in this regard.
“We are not allowed to own Bitcoin. The Federal Reserve Act says what we can own, and we are not seeking a change in the law,” Powell said, noting that such an initiative would be up to Congress.
At the time of publication, BTC was trading at $101.053, down 5% in the last 24 hours. The global cryptocurrency market cap has declined to $3,67 trillion, down 7,6% in the last 24 hours.
Amid market volatility, the Fed has maintained a cautious stance, indicating that future rate cuts will depend on economic data, particularly those related to inflation and the strength of the labor market.
However, some analysts see a potential silver lining in this scenario. According to blockchain analytics platform Santiment, “Considering that BTC has remained above $100K (for now) and has not fallen as aggressively as its normal fluctuations compared to the SP 500, this could be interpreted as a sign of strength once the dust settles in the next 24-48 hours.”
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