Bitcoin continued its downtrend, remaining weak near the $22,500 level as investors opted for safer bets in anticipation of Federal Reserve Chairman Jerome Powell’s testimony before Congress.
It’s worth emphasizing that investors are keeping a close eye on Powell’s remarks, as any sign of a more aggressive stance on interest rates could add to market volatility, especially in the cryptocurrency sector.
However, the long-term losses in the cryptocurrency market began after the publication of a number of positive economic indicators from the United States, which indicate that the economy is gaining strength and the country no longer needs government support in the form of low interest rates.
Consequently, traders and investors began to worry about inflation and the possibility of higher interest rates.
A Bearish Crypto Market and Rising Inflation Concerns
The global cryptocurrency market suffered losses this week, falling from $1.11 trillion last week to $1.03 trillion as of Tuesday morning. Bitcoin (BTC), the first and most famous cryptocurrency, could not stop the fall and fell well below the $23,000 mark.
In addition, other popular cryptocurrencies such as Dogecoin (DOGE), Litecoin (LTC), Ripple (XRP) and others also suffered minor losses. This is due to the caution of investors about investing in riskier assets, given the upcoming testimony before the Congress of the chairman of the Federal Reserve System, Jerome Powell.
Future data and the US dollar
Another factor putting pressure on the cryptocurrency market is the appreciation of the US dollar. The US dollar was broadly stronger and gains were seen on Tuesday in anticipation of Federal Reserve Chairman Jerome Powell’s upcoming testimony to Congress.
Importantly, market participants will be closely watching for any significant indication from Powell that he may revise his plans for just a few more rate hikes this year, and that he is concerned about the recent uptick in economic activity and inflation in the US.
It should be noted that the Fed raised interest rates by 25 basis points at its most recent meeting, following a significant increase last year. However, the robust economic performance in February raised concerns that the central bank may again take more aggressive measures.
Meanwhile, the focus is also on the final policy meeting for Bank of Japan Governor Haruhiko Kuroda on Thursday and Friday.
Bitcoin price
The current price of Bitcoin is $22,400 and the 24-hour trading volume is $16 billion. Bitcoin is down 0.25% in the previous 24 hours. Bitcoin is currently the market leader with a market capitalization of $432 billion.
Technical analysis shows that the BTC/USD pair is currently in a consolidation phase, trading in a narrow range between $22,000 and $22,500. A significant price movement in the Bitcoin market can occur if this range is breached, either to the upside or to the downside.
If the BTC/USD pair breaks the $22,500 mark, it could trigger a sideways breakout and potentially push the price of Bitcoin towards the $22,800 or $23,250 levels. On the other hand, if the $22,000 or $21,750 support levels hold, this could lead to a bounce.
