The anticipated speech by the Chair of the Federal Reserve, Jerome Powell, on Tuesday caused the values of Bitcoin and Ether to undergo heightened volatility.
According to market statistics provided by TradingView, the prices of Bitcoin and Ethereum concluded the day with an optimistic feeling, having increased by 1.5 and 3.5 percent, respectively, over the day.
Powell gave out a hawkish vibe early in the interview, which caused an uptick in equity prices, a surge in the crypto currency market, and a decrease in the US dollar value.
After hinting that if good labor data continues, the peak rate in the current adjustment cycle may be higher, Powell's concluding statements were more hawkish than expected, which came after he said that if strong labor data persists, the peak rate will be higher.
Powell stated that inflation is beginning to drop, but he projected that it would be a protracted process. He also cautioned that interest rates might climb more than the markets expect if the economic data doesn't comply.
"The process of bringing inflation down, sometimes known as the disinflationary process, has begun. It has already started in the goods sector, which accounts for around one-quarter of our GDP...
As previously mentioned, the crypto currency market will have only limited access to the US dollar, but it may start to seem like inflation is coming down. For example, the United States Binance firms, including Binance.com, have yet to indicate that they will momentarily cease bank transfers using US dollars.
Despite the possibility that other exchanges would follow Binance's lead, the crypto currency market will have reduced access to the world's reserve currency due to the Federal Reserve's efforts to tighten its monetary policies.
The Federal Reserve may increase interest rates over the next several quarters to drive inflation down to 2% from its current level, which may harm the price of bitcoin.
A Closer Look at Prices
Since the first of the year, when the calendar changed, the crypto currency market has been upward. The price of Bitcoin has increased by around 36 percent this year, while the cost of Ethereum has increased by approximately 30 percent during the same period.
Following a difficult drop in 2022, short-term traders and cryptocurrency miners have been taking profits during the relief bounce.
Our most recent crypto price oracles indicate that the overall market value of digital assets currently sits at around $1.14 trillion, representing an increase of about 3 percent in the previous 24 hours.
Since the cryptocurrency market is already trading at levels seen before the FTX, analysts anticipate that Bitcoin may experience more gains in the weeks ahead.
Notably, on-chain researchers have spotted money moving from large-cap digital assets to small-cap altcoins, which are forecast to experience a surge in popularity over the next several weeks.
Nevertheless, an upward trend might be negated if the price of Bitcoin drops below $18,000 in the next weeks, which could have repercussions for the market for other crypto currencies.