Bitcoin experienced another drop as the number one cryptocurrency by market cap lost its support level above $35,000 and is still struggling to stay in the middle range. At the time of writing, Bitcoin was trading at $36,120, a loss across the board.
Fed Chairman Jerome Powell’s statement at the Federal Open Market Committee (FOMC) meeting had a negative impact on bitcoin, with the U.S. dollar spiking over the past week as investors expect lower inflation in the coming months.
In turn, commodities such as gold and silver have been affected. In the XAU/USD trading portfolio, the precious metal fell from a high of $1,800 to $1,763 at the time of this article, while the XAG/USD trading portfolio saw similar losses.
Yet there is still hope for a sustained bull market, as economist Alex noted via his Twitter account that Jerome Powell is known to have caused volatility in the market with mutually counterbalancing trading pairs.
Alex Krüger noted, “Look on the bright side, Powell tends to hit the market hard at the Federal Open Market Committee (FOMC) and push the market when he is questioned in Congress, which he will be on Tuesday.”
BenLilly, an analyst at Jarvis Labs, expects the Fed to move to inject dollars into the market in the coming weeks. As a result, the dollar could weaken, giving bitcoin some respite.
BenLilly notes: “The U.S. government may not want the dollar to strengthen when the unemployment rate is higher than expected. This is because a weaker dollar helps create more exports and job growth. So, if this continues, some form of policy push can almost be expected in the next week or two.”
So is $65,000 the projected high for Bitcoin and is the current price of Bitcoin the bottom? With two of the most commonly discussed cryptocurrency-related topics on social media and platforms, the price action in May and June only added to the bearish sentiment in the crypto market.
Trader Josh Rager has been making an “unpopular point” since 2020. At the time, he noted that bitcoin’s peak in the current cycle was likely to be lower than most people expected. At the time, the market was expecting bitcoin to go as high as $100,000 or even $1 million, while Rager thought $78,000 and $85,000 were better expectations.
It’s hard to rule out a market like the one in 2013, where the price reached new highs after a sharp pullback eight months later. But for ROI, the bottom-up cycle to shorten each cycle. So why does it make a difference? People think $65,000 is not high enough, but history proves otherwise.
On the other hand, Raoul Pal, a former Goldman Sachs fund manager, thinks the dollar can only strengthen in the short term. Due to the global economic slowdown, Pal noted that the new crown pneumonia outbreak and embargo measures have many betting on a weaker dollar in 2020.
The opposite seems to be happening, and the foreign exchange market could take a hit. In the short term, this could continue to affect bitcoin and crypto markets, and despite the possibility of such a scenario, Pal remains bullish on the crypto sector in the long term.
This chart of the Euro could have a very large head and a supporting top-bottom. Keep in mind that Wall Street forex forecasters are predicting a weaker dollar in 2021, with dollar positions falling to record short levels. If this situation breaks down, a new macro mechanism is about to come into play.
There seems to be too many unknowns and uncertainties in the price of Bitcoin and the market as a whole. The mid-zone at current levels should act as a key support.
If the downtrend continues, many expect bitcoin to return to the $20,000 area. Bulls will have to push the price of bitcoin up to $40,000 and only time will tell if they will get a boost from Powell and the Federal Reserve.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/how-will-powells-testimony-affect-the-crypto-market-next-week-and-will-bitcoin-collapse-again/
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