Bitcoin’s price action on June 24, 2024, indicates a clear bearish trend. Hovering around ,171, bitcoin has fluctuated between ,580 and ,384 in the past 24 hours. BTC’s market cap is .21 trillion, with a trading volume of .12 billion, reflecting significant market activity despite the decline. The decline on Monday aligned with recent news […]
Bitcoin News
Fed Chair Powell’s Hawkish Tone Rattles Markets as Inflation Concerns Persist
Amid an uncertain economic landscape, Federal Reserve Chair Jerome Powell’s recent remarks have amplified the debate on the sufficiency of prevailing interest rates. Even with robust gross domestic product growth, Powell’s address indicated the Fed’s stern stance, as he noted the central bank is “not confident” its restrictive policies have sufficed.
Federal Reserve Chair Admits Uncertainty Over Impact of Interest Rate Policies
Jerome Powell, in a candid exposition at an International Monetary Fund (IMF)-hosted event in Washington D.C., remarked, “We know that ongoing progress toward our 2 percent goal is not assured” and he further added that “inflation has given us a few head fakes.” Powell stated that the Fed is prepared to “tighten policy further” if necessary. His analysis highlighted the Fed’s unyielding resolve to temper inflationary pressures and get to the 2% goal.
Gold prices remained stable amid Powell’s hawkish sentiment, while crypto assets continued to show strength. Bitcoin (BTC) approached the ,000 mark in the early morning trading sessions on Thursday before receding. All four major U.S. benchmark indices fell, with declines ranging from 0.65% to 1.57%. The Russell 2000 saw the most significant drop at 1.57%, the Nasdaq was down 0.94%, the Dow Jones lost 0.65%, and the S&P 500 decreased by 0.81%. The New York Stock Exchange (NYSE) closed 0.76% lower.
The Fed’s chairman explained the mysterious nature of the current inflationary period, sparked initially by unanticipated shifts in demand and labor supply due to the Covid-19 pandemic. Despite a fleeting decrease in core PCE inflation, Powell said the stubborn resurgence towards the end of 2021 compounded the challenge, entwined with the tight labor market and robust household demand, exacerbating inflationary tensions.
“[A] response of monetary policy to higher prices stemming from an adverse supply shock should be attenuated because it would otherwise amplify the unwanted decline in employment,” Powell insisted. However, the chairman further added that:
Responding aggressively to quickly passing price increases could exacerbate macroeconomic volatility without supporting price stability.
Meanwhile, the 10-year Treasury note is coasting along at 4.636 up 0.98% over the last five days. Manish Kabra, a strategist at Societe Generale SA in London, remarked on Friday that, “Powell’s statement moved the trading consensus that the US 10-year yield has peaked for the year. Hence risk-assets that rallied in the last few weeks are re-assessing ‘what if’ the US 10-year yield is back to 5%,” Kabra added.
What do you think about the Fed chairman’s recent speech? Share your thoughts and opinions about this subject in the comments section below.
Bitcoin Rallies Strongly as a $30bn Dump Rattles US Stock Futures
Bitcoin prices rose aggressively heading into the European session Monday, breaking above ,000 as traders pinned their hopes on another all-time high milestone ahead.
The benchmark cryptocurrency was changing hands for ,146 at 10:18 UTC, up 4.25 percent from its intraday open. A record expiry of billion worth of options contracts on Friday helped ease downside pressure in the Bitcoin market as the spot price rallied towards the bullish strike rate of ,000.
A Macroeconomic Coincidence
More tailwinds for the cryptocurrency came from a struggling US market on Monday.
Futures tied to Wall Street indexes, including the S&P 500 and the Dow Jones Industrial Average, slid in the pre-market session, pointing to losses after the New York opening bell. The indexes’ futures incurred losses after a large investment fund dumped billions of dollars in holdings, stoking concerns that global banks who dealt with the firm could face heavy losses, as well.
The move was by Archegos Capital Management, an investment firm owned by former Tiger Asia manager Bill Hwang — a fund manager with a history of participation in wire fraud. The firm unwound billion worth of holdings in a handful of companies, including Discovery and ViacomCBS, leading to massive crashes in their stock rates.
Bitcoin held its gains by then, undergoing a modest downside correction but nothing that could offset its early morning gains.
![US dollar index was firm heading into European session. Source: DXY on TradingView.com](https://www.newsbtc.com/wp-content/uploads/2021/03/1gFWqcWc-860x498.png)
On Monday, Credit Suisse Group and Nomura Holdings admitted that they suffered substantial losses from their US client dealings. The banks did not name Achegos Capital directly.
Shares in European markets were trading flat after getting weighed down by the Credit Suisse shares. The pan-European Stoxx 600 was up 0.31 percent after erasing most of its early morning gains tied to mining, oil & gas, travel, and leisure shares.
Bitcoin does not have any correlation with stock markets. But the cryptocurrency still tends to react to the trends on Wall Street erratically. It had crashed by almost 60 percent in March last year in just two days amid a global market rout.
Nevertheless, Bitcoin lately started reacting to developments in the US bond market. A sharp climb in the benchmark 10-year Treasury note in the week ending February 28 coincided with a 21 percent decline in the Bitcoin market.
The cryptocurrency later recovered its bullish momentum, hitting even a new record high, after the bond yields stabilized near their 14-month peak. Interest rates for the 10-year note were stable on Monday, as well, dropping to 1.657 percent. Yields drop when the bond prices rise.
Bitcoin Outlook Ahead
The BTC/USD exchange rate has broken out of a bullish continuation pattern after its latest move upside.
![Bitcoin prices jump above ,000. Source: BTCUSD on TradingView.com](https://www.newsbtc.com/wp-content/uploads/2021/03/wwXq2cCg-860x498.png)
Dubbed as Bull Flag, the pattern hints at a breakout upward by a length equal to its previous uptrend’s height. That somewhat puts the bitcoin price target way above its previous all-time high at ,778 (data from Coinbase).
Meanwhile, a downside correction as Bitcoin’s Relative Strength Indicator crosses 70 would indicate a potential decline towards the blue wave (it is the 50-4H simple moving average).
Photo by Robert Bye on Unsplash