tl;dr
Bitcoin (BTC) is showing signs of slowing down following the latest US inflation data and a speech by Fed Chair Jerome Powell, who indicated that there is no immediate need for further interest rate cuts. The US PPI inflation data exceeded expectations at 2.4%, and Powell emphasized the need for con...
Fed Chair Jerome Powell indicated no urgency for further interest rate cuts, emphasizing the economy's strength and the need for prompt monitoring to maintain acceptable inflation levels.
Market reacts to Powell's speech with BTC facing its first major correction and other cryptocurrencies also paring off gains, possibly due to the perception of traditional assets becoming more appealing with halted interest rates.
Bitcoin (BTC) is showing signs of slowing down following the latest US inflation data and a speech by Fed Chair Jerome Powell, who indicated that there is no immediate need for further interest rate cuts. The US PPI inflation data exceeded expectations at 2.4%, and Powell emphasized the need for continued monitoring of the economy to guide future decisions.
The news has negatively impacted the crypto market, with BTC experiencing its first major correction, trading at $87,328, down 3.12% in 24 hours. Other cryptocurrencies like XRP, Ethereum (ETH), Solana (SOL), and Binance Coin (BNB) are also paring off their gains in response to the market uncertainty.
The halt in interest rates might make traditional assets more appealing to investors, potentially impacting Bitcoin's status as a hedge against inflation.
Bitcoin (BTC) appears to be running out of steam after the latest US inflation data and speech from Fed Chair Jerome Powell speech on what the market should expect per interest rates moving forward. The Fed Chair’s statement comes about a week after the apex bank implemented its second rate cut for the year.
FED CHAIR ON WHAT NEXT FOR INTEREST RATE
In his speech, Fed Chair Jerome Powell said the state of the economy shows there is no urgency for further interest rate cuts. The Fed Chair said the economy’s strength is promising and that it will engage in prompt monitoring of the economy. The essence of this is to ensure that inflation stays within an acceptable range.
As reported earlier today, the US PPI Inflation data comes in at 2.4%, exceeding the broader market’s forecast. The PPI serves as one of the Federal Reserve’s favorite gauge for market strength. That the PPI is close to the 2% inflation range serves as a good omen. When the Fed slashed rates by 0.25% last week, many speculated that the Fed may implement more rate cuts this year. In his Dallas speech, Jerome Powell said the Fed will continue to monitor market data to guide its next decisions. Despite the generally positive reading in most inflation gauges, Powell said he expects fluctuations in the future.
For over four years, the Feds adopted a hawkish approach to interest rate. The bank did not follow the bandwagon when other Central Banks implemented rate cuts. While this Fed Chair Jerome Powell speech clears doubts about immediate cut, it remains uncertain what might happen next year.
BITCOIN AND CRYPTO MARKET REACTS
After an eclectic week that saw BTC price soar to an ATH above $93,000, the coin is now facing its first major correction. The Fed Chair Speech has triggered investors negatively, with some now taking their profit out of their accrued gains. At the time of writing, the price of Bitcoin has breached the $88,000 support and was trading for $87,328, down 3.12% in 24 hours. The premier coin traded within a tight range from a low of $87,583.99 to a high of $91,756.22. While the price of XRP jumped to $0.8, its highest level thus far this year, it is swiftly losing its gains. Ethereum (ETH), Solana (SOL), and Binance Coin (BNB) are also paring off their gains in correlation with Bitcoin. The mild panic is the market is understandable. Halting interest rates might make traditional assets more appealing to investors. This way, Bitcoin might lose its attraction as a hedge against inflation. This might also be a knew jerk reaction to this news as BTC investors might focus on the industry’s positive growth markers.