People are scared – Crypto is preparing for another earthquake after the $ 2 trillion crash in the price of Bitcoin and Ethereum.

Bitcoin, ethereum and cryptocurrency prices rose this week after a sharp fall that wiped out $ 2 trillion from the combined cryptocurrency market.

The Bitcoin price dipped below the threshold of 20,000 USD per. bitcoin over the weekend (which some influential traders feared) before rising higher. Ethereum has dropped below $ 1,000 per ether for the first time since January 2021 as the network prepares for a controversial upgrade.

Now, after the Federal Reserve stunned markets with the biggest rate hike since the 1990s, billionaire head of the FTX cryptocurrency exchange Sam Bankman-Fried has accused the Fed of collapsing bitcoin and cryptocurrency prices and warned that people are “banged” ahead. by Fed Chairman Jerome Powell’s long-awaited testimony Wednesday.

Federal Reserve Chairman Jerome Powell announced this month the largest rate hike since … [+] 1994, the price of bitcoin, ethereum and the broader crypto market plummeted.

“Literally, the markets are scared,” Bankman-Fried, often known as SBF, told NPR this week. “People who have money are scared.”

Bitcoin and cryptocurrency prices have crashed with stock markets in recent months, with the S&P 500 plunging into a bear market last week, pulled down by technology companies that had risen by the time of the pandemic.

“The main driver behind this has been the Fed,” the SBF said, adding that Mr Powell is “caught between rocks and hard” as he seeks to bring down runaway inflation, which has accelerated to 8.6% in May. , a 40-year high.

On Wednesday, Powell will speak before the Senate Banking Committee in the first of two days of biannual monetary policy testimony, where he is expected to outline how far and how fast the Fed could go to fight inflation while trying not to trigger a recession. .

“The obligation [de la Fed] “Restoring price stability – which is necessary to maintain a strong labor market – is unconditional,” the Fed wrote in its biannual monetary policy report to Congress last week.

After the Fed raised its benchmark rate by 75 basis points for the first time in almost three decades last week, new economic projections have revealed that politicians expect interest rates to reach 3.4% by the end of 2022, the highest level since 2008 .

The price of bitcoin has risen 5% in the last 24 hours and crosses back over the highly monitored threshold of … [+] $ 20,000 per bitcoin and helps ethereum and coins recover.

The mood among observers of the cryptocurrency market is gloomy despite the bitcoin price rising this week.

“The bear market is likely to continue until we hear the first hints from the Fed about stopping aggressive austerity,” FxPro senior market analyst Alex Kuptsikevich said via email.

“What should be noted is that key options expire over the next few days, so volatility can be expected, but the macro trend is likely to remain bearish until we see the Fed change or at least soften its position at the Federal Open meeting. Market Committee [fixation des taux] July, “wrote Joe DiPasquale, CEO of bitcoin and cryptocurrency hedge fund BitBull Capital, in emailed comments.

Thomas Estimbre
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