Bitcoin Stalls Over $26K After Fed Chairman Powell's Speech

Bitcoin made a fall down from $27,000 on Saturday after trading above the $27K mark for a while. As per the Asian trading time, Bitcoin is making a red candle which is expected to go below the $26,103 mark (the next support) before falling down further.

Meanwhile, The recent address by Fed Chair Powell has created much attention and conjecture in the financial sector. 

Powell's words carry significant weight as one of the most prominent personalities in the global economy and have the ability to affect different industries, including the cryptocurrency market. 

Traders and investors are scrutinising his words for clues about the future path of monetary policy and its implications for Bitcoin and other cryptocurrencies.

Bitcoin Affected by Fed Rate Hike May See Volatility

Bitcoin (BTC) remained below $27,000 as U.S. Federal Reserve Chair Jerome Powell suggested that stress in the banking sector may allow the central bank to scale down rate rises in order to cool heated inflation.

BTC's price climbed to over $27,200 late Friday morning before dipping to $26,436 after Powell, speaking with former Fed Chair Ben Bernanke at the Thomas Laubach Research Conference, suggested that credit stress may mean interest rates do not have to rise as high as originally assumed.

“The financial stability tools helped to calm conditions in the banking sector,” stated Powell.

He further extended, “Developments there, on the other hand, are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring and inflation,” he continued. “As a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals.”

The overall, financial market including cryptos is affected by the statement as most of the coins traded downside the next day. Let's see how the Bitcoin price moved after this.

Bitcoin Price Analysis

Bitcoin (BTC) is currently trading at $26,875.19, with a 24-hour trading volume of $6,326,177,802. This indicates a -0.19% decrease in the previous 24 hours and a 0.35% gain in the last seven days. Bitcoin has a market valuation of $520,800,009,409 and a circulating supply of 19 million BTC.

The existence of a double top pattern offers more support to this major level, and a break over $27,700 may potentially take BTC to even higher levels, with a goal of $28,200.

However, it has been seen that a double-top pattern indicates a further slump, which is followed by decreasing trading volumes and strong sell-offs. Furthermore, the 14-day RSI is at 44 and is in a neutral region breakout to which can cause volatility in the BTC price.

Source: TradingView

Bitcoin Onchain Analysis

Glassnode reported that a significant quantity of Bitcoin supply that had been dormant for the previous 5 to 7 years has come into the market. The long-awaited arrival of +862,000 coins, purchased during the 2018 market top, has now finished its voyage through the difficult periods of the 2019 Bear Market, the COVID-19 Crash, and even the current LUNA/FTX contagion.

Glassnode, a well-known crypto analytics organisation, revealed this unique trend, emphasising the incredible endurance of these long-held currencies. Despite experiencing prolonged periods of turbulence and uncertainty, they have finally surpassed the 5-year age band maturity criterion.

As a consequence, the overall Market Cap of Bitcoin coins aged 5 to 7 years has risen to an all-time high of $49.9 million, showing the enormity of this newly discovered supply. 

Conclusion

In conclusion, the Fed chairman's speech has affected Bitcoin's volatility leading to a further downturn to $26.5K. Overall, the market sentiment is positive as per onchain analysis. The technical indicators are pointing towards a Bearish market right now but chances of a retracement to the $28K level is higher.