Jerome Powell makes crucial comment for the cryptocurrency market
U.Today – Jerome Powell, Chairman of the Federal Reserve, recently made statements that carry substantial weight for financial markets, including cryptocurrencies. His comment, “I wouldn't say we've achieved a soft landing yet,” reflects the central bank's current caution amid economic recovery efforts.
Additionally, Powell's admission of being in “risk management mode” to avoid acting too hastily or too late, along with the expectation to reduce the policy rate this year if the economy performs as projected.
These comments from Powell are critical for the cryptocurrency market because they indicate that the Federal Reserve is still struggling to bring the economy to a state where inflation is under control without triggering a recession.
The implications for risk assets such as cryptocurrencies are significant. Cryptocurrencies are often considered a hedge against inflation and can be sensitive to changes in interest rates, which influence the cost of capital and risk appetite in the broader market.
If the Federal Reserve manages to manage this economic balancing act, we could see a positive impact on the cryptocurrency market. On the other hand, if investors perceive central banks' policies to be too restrictive or not sufficiently preventive against inflation, this could lead to increased volatility and possible downtrends for risk assets, including.
bitcoin review
Bitcoin is currently facing resistance at the $42,500 level, with key support at around $39,000. A break below this support level could indicate a short-term bearish outlook, potentially testing additional support near $35,975. The moving averages suggest a consolidating market and the RSI, which hovers around the midline, points to neutral momentum.
A reduction in official rates could lead to an increase in risk appetite, which could push Bitcoin price to retest resistance levels. The next resistance lies near the $42,500 level, and a break here could see Bitcoin targeting the $46,000 area.
This article was originally published on U.Today.
