Bitcoin briefly hit a one-month low as U.S. stocks tumbled as Federal Reserve Chairman Jerome Powell announced tougher measures to reduce inflation.
After the presentation, the Dow Jones Industrial Average fell 3%, with further losses following the market close on Friday, Aug. 27, 2022.
Despite a temporary but insufficient respite in July 2022, Powell’s announcement comes at a time when U.S. inflation is above 2%.
Following the July 2022 Consumer Price Index Report On Aug. 10, 2022, Bitcoin rose from $22,826 on Aug. 10 to $24,750 on Aug. 11 due to lower-than-expected inflation data for July. also reboundedhit $2,000 on Aug. 15.
Crypto faces more pain as ETH whales cash out
Dow Jones Industrial Average’s Plunge Accompanying S&P 500 lose 3.3% and the Nasdaq Composite fell 4% as investors weighed the impact of keeping interest rates high for longer. Bond prices also edged lower.Total losses in the U.S. stock market over $1.25 trillionsurpassing the market cap of Bitcoin and all other altcoins.
After the chairman’s speech, the market value of cryptocurrencies fell to $936.87 million, of which Bitcoin Temporarily drop Below $20,000. Ether fell 14% in intraday trading to around $1,500, erasing most of its August 2022 gains.
To underscore the impact of high inflation and high interest rates, the Commerce Department said on Friday. On August 26, 2022, it was announced that consumer spending rose only 0.1% in July, compared to 1% in June.
This suggests that consumers are tightening their belts, which could mean cashing out in cryptocurrencies.
as report On CNBC’s Crypto World on Aug. 26, 2022, Ethereum whales are moving their ether to exchanges, signaling a desire to exit the market in the past. This is because doubts abound about the upcoming Ethereum merger, as developers grapple with bugs in the code that merged the Beacon Chain consensus layer with the current Ethereum execution layer.
Fed meeting nears, interest rates show no sign of respite
The Fed’s pace of rate hikes (0.5% in May 2022 and 0.75% in July 2022) marks the most aggressive tightening since central banks began benchmarking interest rates in the 1990s.
Although many bankers and academics expected The Fed will not continue its strategy of slowing economic growth, arguing that short-term pain for households and businesses is a necessary price to avoid more pain in the future.
At the July meeting, Chairman Powell said an “unusually large” rate hike is likely at the Sept. 20-21, 2022 FOMC meeting, which could lead to higher rates as investors reduce risk. The crypto market sells off further.
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