While the Fed Chairman and members were making speeches, Bitcoin fell below $23,000 over the weekend. cryptocoin.com We have compiled for you what is expected after the speech of the FED chairman.
A strong labor market
“Bitcoin continues to lose momentum after the stronger than expected January jobs report forced the market to prepare for two more rate hikes,” said Yuya Hasegawa, a crypto market analyst at Japanese Bitcoin exchange Bitbank.
He also said, “Bitcoin has survived a week full of important events and economic data while holding the price around $23,000, but the market may have exhausted all reason to buy the cryptocurrency and be subject to profitable sell orders this week.”
On Friday, the Department of Labor reported the strongest increase in nonfarm payrolls and the 53-year low in the unemployment rate since July, with 517,000 for January, well above the Dow Jones estimate of 187,000. Treasury yields rose after the numbers were released, followed by the US dollar index.
“The report deals a blow to anyone who expects the Fed to cut interest rates soon,” said Noelle Acheson, economist and author of the Crypto is Macro Now newsletter. Then ‘The rise in employment and the official unemployment rate cut to a 50-year low shows that this scenario is still far away and reminds the market that the Fed has no other reason to cut rates.’ he added.
Fed chairman to speak again
For a few investors and analysts, the crypto market is in an uptrend and likely found a bottom at $17,000 in December, but is likely to pause at least one more time before embarking on a more meaningful bull run. According to Wolfe Research, Bitcoin is trading in its ‘deepest overbought state in over two years’ and ‘needs a brake check’.
Many believe that the macro environment will continue to be a major challenge for risky assets, including crypto. In 2022, crypto’s correlation with stocks was at its highest, and this trend is unlikely to end.
Fed chairman Jerome Powell is scheduled to speak at the Washington DC Economics Club today, and several other Fed members are scheduled to speak this week.
“Given the market’s failure to completely suppress the market’s optimistic interest rate outlook last week, Fed members will likely continue to remind the market that the Federal Funds rate will rise above 5 percent and be kept there throughout the year,” Hasegawa said.
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