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Fed’s ‘Critical’ Warning Triggers Serious Alarm Over $50K Bitcoin Price Crash as $200 Billion Wiped Out of Ethereum, XRP, Solana, Crypto
Update 07/04 below. This post was originally published on July 03
Bitcoin
Bitcoin
suddenly crashed towards $60,000 per bitcoin after a Billionaire Bitcoin Buyer Reveals He’s Changed His Mind About Bitcoin.
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The price of bitcoin has struggled in the last month, down nearly 15% as fears of a “real correction” grow.
Now, after one of bitcoin’s biggest proponents claimed that the cryptocurrency could eventually replace the US dollarFederal Reserve Chairman Jerome Powell warned of a “critical period” for the Fed, calling deficit levels “unsustainable.”
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U.S. Federal Reserve Chairman Jerome Powell has warned that the Fed is going through a “critical” period that could … [+] cause chaos in bitcoin prices.
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“The level of debt that we have is entirely sustainable, but the path that we are on is not sustainable,” Powell said at the European Central Bank conference in Portugal, reported from the Financial Times, adding that the Biden administration was taking too many risks “running a very large deficit at a time when we are at full employment” and said that “you can’t maintain these levels in good economic times for very long.”
In May, Treasury Secretary Janet Yellen issued a sobering warning about the spiraling $34 trillion U.S. debt that some think could help push the price of bitcoin to $1 million in the next 18 months.
Bitcoin, cryptocurrency and stock traders have been watching the Fed closely for signs of a possible interest rate cut in recent months, forcing analysts to revise expectations of around seven cuts in 2024 to one or two.
“Finding the right balance on monetary policy during this critical period is really what I’m thinking about in the wee hours,” Powell said in response to a question about his top concerns, according to the AP. reported.
Update 07/04: The price of bitcoin and the cryptocurrency market have taken a major tumble over the past 24 hours, with the price of bitcoin falling well below $60,000 and wiping $200 billion off the combined cryptocurrency market since July 1. Ethereum and the rest of the mainstream market are down more dramatically than bitcoin, with ethereum rival solana, the Telegram-linked toncoin, and the meme-based dogecoin all down nearly 10% since yesterday at this time.
“Bitcoin is breaking out of significant technical and psychological levels at $60,000,” wrote Markus Thielen, founder of 10x Research, in emailed comments.
“This is a key level for bitcoin miners and spot bitcoin exchange-traded fund (ETF) buyers, and it also broadly marks the bottom (support) of the three-month trading range. Price declines could accelerate as support is broken and sellers scramble for liquidity. Only uninformed traders are willing to buy here. A break of this support could cause a sharp decline to the low $50,000s.”
Last month, the Federal Reserve left interest rates unchanged and signaled it would make just one cut in 2024, with more to come in 2025. The Fed has been under pressure to cut interest rates after raising them at a record pace following massive Covid-era stimulus spending and money printing that sent inflation spiraling out of control.
“Powell said the U.S. was back on a ‘disinflationary path,’ but added that more data was needed before the Fed would consider a rate cut,” Russ Mould, chief investment officer at AJ Bell, said in emailed comments. “That last line sounds like a broken record to the market, so the most important part of Powell’s speech was the reference to disinflation, as investors interpreted that to mean there is a stronger case for a rate cut in the near term.”
Attention now turns to Wednesday’s release of the minutes from the Fed’s June meeting and Friday’s jobs report, which could “solidify” expectations of a September interest rate cut if hiring slows.
“A weaker-than-expected jobs report on Friday, if it comes to fruition, would likely further solidify the case for such a cut, which markets are placing at about a 70% chance, perhaps a little underestimated,” said Michael Brown, senior research strategist at Pepperstone. said Market observatory.
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The price of bitcoin has dropped from its recent high of over $70,000 per bitcoin.
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The environment of high interest rates for a prolonged period has triggered a warning from analysts at the world’s largest asset manager, BlackRock, who said that an “unprecedented” scenario is unfolding that could hit the price of bitcoin and the cryptocurrency market.
“We see central banks being forced to keep interest rates higher than pre-pandemic to address lingering inflationary pressures,” said analysts at BlackRock, which helped engineer a bitcoin price boom this year. leading a bitcoin spot exchange-traded fund (ETF) revolution on Wall Streethe wrote in a report.