Bitcoin (BTC) and crypto currency suffered huge losses after the United States Federal Reserve made hawkish statements about economic policy on August 26.
Analyst: Powell drops ‘soft landing’ rhetoric
Investors rushed to reduce the risk as Fed Chairman Jerome Powell suggested that higher rate hikes are still on the table despite the latest data implying that inflation is already slowing.
“Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record is a strong warning against premature policy easing,” Powell said at the annual Jackson Hole economics symposium. said. aforementioned.
The S&P 500 fell 3.4 percent on the day to its lowest level since the end of July. The Nasdaq Composite Index copied the move, cutting losses by 4%.
Some argued that Powell’s statements were not the main consideration for future Fed policy, while others noted that previous narratives were gradually abandoned when it came to the inflation outlook.
Stop focusing on what JAYPOW says, and focus on what he does
Holger Zschaepitz, popular market commentator for German media outlet Die Welt, described the speech as Powell “skipping the pigeon notes” and reaching all the hawk notes.
“The hawk traits were probably an acknowledgment of the pain needed to keep inflation low – no more soft landings, an indication that rates will need to be taken above neutral,” he wrote in a section of his Twitter comments.
No hodler can hide the pain
BTC/USD fell as low as 8.8% at one point and fell below $20,000 for the first time since July 14 and rallied to linger just above the key line in the sand.
The situation for altcoins was no less dire. Ether (ETH), the largest altcoin by market cap, has seen intraday losses approaching 14%. ETH/USD hugged $1,500 at the time of writing on August 27 and wiped out all gains for a month. Amid the price spikes, a recent warning came from popular trader Crypto Ed, who expects the next step to drop further.
“It could drop to $1,200-1300 before any big jump,” part of the latest Twitter update said.