The Bitcoin race had a big blow this weekend. The digital currency dropped below $ 100,000 after the United States actively mixed in the conflict between Israel and Iran. American air strikes on nuclear installations in Iran further wandered the tensions and scared investors.
The course has recovered slightly since then, but sentiment remains brittle. And with new macro-economic events on the agenda, the chance of further volatility is high.
Bitcoin race springs after fall under 100,000 dollars
Bitcoin (BTC) was still well above $ 110,000 a week and a half ago. In the meantime, the price has fallen to around $ 101,400. The hard blow came when the United States mixed with air strikes in the conflict between Israel and Iran. That escalation shook up the market considerably.
Although Bitcoin managed to recover light afterwards, investors remain waiting. As long as there is no insight into a diplomatic solution between Iran, Israel and the US, the chance of large price movements seems to only increase.
FED chairman Jerome Powell speaks for congress
In addition, all eyes are aimed at Federal Reserve (FED) chairman Jerome Powell. On Tuesday he speaks for the American congress during the half -annual interest rate lead report of the Central Bank. Such a moment only occurs twice a year, and investors always listen.
Why? Because Powell’s words are often a harbinger of what the Federal Reserve intends with the interest. And it is precisely this interest that is crucial for markets such as crypto: the lower, the more attractive becomes risky investments. The hope for relaxation lives, but whether Powell feeds that expectation is uncertain.
He can prepare for spicy questions, especially from Republican corner. They have been worried about the towering interest rate of 5.25 percent for some time. The interest charges on the American national debt – now almost 37 trillion dollars – amount to more than 1 trillion annually.
However, Powell will probably stick to the current course. According to the Futuresmarkt, there is indeed a chance of one or two interest letings later this year. In that scenario, the interest rate would drop to around 3.75 to 4.00 percent.
Inflation figure can give direction to BTC expectation
The Core PCE inflation, one of the most important inflation size bars of the FED, will also be released on Friday. This measures the price increase of goods and services, without the volatile costs of food and energy.
Inflation has been falling steadily for months: in February it was still 2.92 percent, in May at 2.6 percent. If the trend continues, the chance of interest rates grows. And that could boost the cryptomarkt.
Source: https://newsbit.nl/powell-inflatie-en-oorlog-cruciale-week-voor-de-cryptomarkt/
