By
Godfrey Benjamin
April 20th, 2024
However, Bitcoin price could edge lower in the coming quarters as the Fed hikes interest rates in a bid to bring down inflation to 2 percent.
Bitcoin and Ether prices experienced increased volatility on Tuesday following the awaited speech from Fed Chair Jerome Powell. According to market data from Binance-backed Coinmarketcap and TradingView, Bitcoin and Ethereum prices closed the day with a bullish sentiment up 2 and 3 percent respectively during the day. At the start of the interview, Powell sounded dovish, thus triggering a jump in equities, the crypto market, and a decline in the USD. However, Powell’s final remarks were more hawkish than expected after indicating that if strong labor data persists, the peak rate in the current tightening cycle may be higher.
Powell said that inflation is beginning to ease, though he predicted it will be a long process and cautioned that interest rates could rise more than markets anticipate if the economic data doesn’t cooperate.
“The disinflationary process, the process of getting inflation down, has begun and it’s begun in the goods sector, which is about a quarter of our economy…But it has a long way to go. These are the very early stages,” Powell said.
The crypto market could feel the process of getting inflation down with minimal access to the US dollar as before. For instance, none of United States Binance’s entities, Binance.com, announced that it will temporarily halt US dollar bank transfers today.
While the move by Binance could trickle down to other exchanges, the crypto market will have less access to the global reserve currency as the Fed tightens its monetary policy. Ultimately, Bitcoin price could edge lower in the coming quarters as the Fed hikes interest rates in a bid to bring down inflation to 2 percent.
Closer Look at Bitcoin and Ether
The crypto market has been on a rising trend since the calendar flipped in January. Bitcoin price has gained approximately 36 percent YTD whereas Ethereum has delivered about 30 percent in the same period. The relief rally has seen short-term traders and crypto miners take profits after a painstaking collapse in 2022.
According to our latest crypto price oracles, total digital assets market capitalization stands at around $1.14 trillion, up approximately 3 percent in the past 24 hours. With the crypto market trading at pre-FTX levels, analysts believe Bitcoin could rally further in the coming weeks.
Notably, on-chain analysts have identified money leaving large caps digital assets to small caps altcoins that are expected to heat up in the coming weeks.
#BTC consolidation inside the triangle (orange/green) may continue for a few more days
Altcoins are likely to rally upwards in the meantime$BTC Daily Candle Close above orange Lower High resistance would likely be enough to confirm a breakout to the upside#Crypto #Bitcoin pic.twitter.com/1ytMnb1wvG
— Rekt Capital (@rektcapital) February 7, 2023
Nonetheless, a rising trend could be invalidated should Bitcoin price dump below $18k in the coming weeks, which could trickle down to the altcoin market.