US Federal Reserve Chairman Jerome Powell in Jackson Hole yesterday evening had a strong bearish influence on Bitcoin and Ethereum. The Chairman of the Diet retained his post hawk, expressing determination to continue the inflated cycle to stop the price spike. The institution’s stated ambition remains to implement monetary policy “moderate enough to reduce inflation to 2%”, which slows economic growth.
There was fear again on notice
After a succession of interest rate adjustments, this Friday’s speech, albeit feared, crystallized hopes for monetary easing. This situation would be favorable for the cryptocurrency markets. However, it was very different. Fed Chairman Jerome Powell reiterated his wish fight hard against inflation.
Although US inflation figures from July were weaker than expected, Powell said:
The July figures on falling inflation are welcome, but not enough to give the Fed confidence in falling inflation. (…) A sustained period of below-trend growth is likely to be needed to reduce inflation.
At the end of this statement, the New York Stock Exchange closed sharply lower. At the same time, Bitcoin and Ethereum suffered from this announcement wave.
Bitcoin suffers from this statement
After the Fed’s offensive stance was confirmed, the cryptocurrency markets suffered a sharp decline. After a rocky week for Bitcoin around the $21,000 axis, the cryptocurrency unscrewed on Friday.
Bitcoin is indeed lost 7.62% since the announcement and is trading, at the time of writing, at $20,086. Thus the crypto asset failed to hold itself above the crucial level of $20,800.
The next level to watch is the psychological threshold of $20,000. That could show some resilience after consolidating their support role from 14 July. A downward crossing of the latter, on the other hand, could indicate a wave reversal bearish for BTC.
Ethereum is not spared
Like Bitcoin, Ethereum has bounced back since Jerome Powell’s statement on Friday. Cryptocurrency is, in fact, fell 12% from this notice. Trading at $1687 yesterday, ETH is currently worth $1476.
This stall comes as Ethereum went three weeks in the lock after growing 9.7%. The cryptocurrency, however, failed to hold above its key threshold of $1,500. That’s right, a large number of buyers focus on the edge of 1400 dollars. Therefore, it is possible to think that the price of ETH will quickly cross the level of 1500 dollars upwards.
There have been many liquidations
According to data from Coinglass, nearly 122,000 traders have liquidated their positions since Jerome Powell’s speech. In total, these liquidations amount to approx $380 million. While $95.31 million worth of Bitcoin was liquidated, almost $166 million was liquidated for Ethereum.
Additionally, a significant reduction in buying pressure was observed on Friday for these two cryptocurrencies. At the same time, Jerome Powell’s remarks caused an eruption of short positions on the BTC.
September 21 is the next date to remember and is likely to shake up the markets. That day will take place the next meeting of the FOMC committee of the Federal Reserve. Given the orientation of the monetary policies required by the organization, there is little doubt about the content of the upcoming statements. However, it will be necessary to observe whether the cryptocurrency markets, at this time – and especially after the highly anticipated Ethereum Merger – will be more resilient in the storm.