© Reuters.
Investing.com – It fell over the past few hours with the currency falling below $43,000, as Federal Reserve Chairman Jerome Powell’s comments cooled hopes for an imminent interest rate cut.
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In a globally expected move, the Federal Reserve left the benchmark federal funds rate range unchanged at 5.25%-5.5% after the Federal Open Market Committee’s first meeting of the year. Market participants were more keen to watch for clues about when the Fed might start cutting interest rates, with many observers expecting it to happen as soon as the next meeting in March.
“I don’t think it’s likely that the committee will reach a level of confidence by the March meeting to determine that March is the right time to cut rates,” Powell told reporters yesterday.
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Jerome Powell added that the Fed will continue to closely monitor monetary policy before making any decision on interest rates. Adding that the labor market is still restricted, and labor demand still exceeds supply.
Powell stated that it would likely be appropriate to start lowering interest rates this year, but stressed that the Fed is prepared to maintain the current interest rate for a longer period if there is a need for this matter.
The head of the US Federal Reserve explained that the US central bank is not looking for inflation to reach 2% levels all at once, but rather is looking forward to its stability at these levels.
High-risk assets including cryptocurrencies fell sharply in the wake of that direct signal from the US Federal Reserve Chairman. Bitcoin fell to levels approaching 42,000 from the highest daily level of $43,700 during yesterday’s trading, as it now records $42,167, declining by about 2% over the past 24 hours.
Meanwhile, other major cryptocurrencies such as (ETH), Cardano, Avalanche, and Polka Dot declined by rates ranging between 3% to 4%, while losing more than 6% during the past 24 hours as they fell below $100.
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“Any possible hawkish rhetoric about a longer-than-expected period of interest rate hikes could lead to a correction in the stock market and, as a result, an outflow of capital from risky assets like Bitcoin,” said Ruslan Lenka, head of markets at fintech platform Web3 YouHodler.
However, Bitcoin’s move to the downside may be limited as the largest cryptocurrency appears to be consolidating between $44,000 and $42,000 without a clear direction, Swissblock analysts said in a report on Wednesday.
The report added that the $42,000 area and below the $40,000 level could serve as key support levels for the price where buyers may intervene.
2024-02-01 08:51:00
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