Powell’s Thursday night speech weighed on United States Markets and resonated on cryptos, translating to emerging breakaways from critical support lines.
A plunge in the United States stock indices increased the negative effect of the speech by Fed’s Chair, Jerome Powell. Powell stated that the bank could aggressively stiffen fiscal policy during the May meeting. The crypto market reacted with downswings. Bitcoin dropped to $40,700, losing around 2.3% over the previous 24 hours. ETH lost 2.4%, whereas other top ten alts remain down 0.4% (LUNA) to 4.7% (DOT).
The global cryptocurrency market cap dropped 2.2% over the past day to $1.88 trillion (Coinmarketcap data). BTC’s dominance index dipped to 41.0% because of its tight connection with the under-pressure stock market.
The crypto Fear & Greed Index dropped one point to 26 today. That came after the index spent three days around 27 (fear). Early sessions on Thursday saw BTC exploring highs seen eleven days ago, neat $43K. The day saw BTC-USD crossing the 50-day MA, which often indicates medium-term bias, but could not close beyond it.
The stock market pressure saw the world’s largest crypto fracturing the bullish structure following a breakaway from a foothold, welcoming trend reversals. Nevertheless, it may be early to annul bulls’ strength.
Chainalysis data shows US cryptocurrency investors saw record returns of about $46.9 billion last year, followed by $8.1 billion in the UK and $5.8 billion in Germany. Russian investors earned approximately $4.3 billion. Meanwhile, the Bank of Canada believes most Canadians that invest in BTC lack monetary literacy. On the other hand, knowledgeable individuals have little to no crypto exposure.
Though the latest crash triggered a bearish outlook in the crypto spectrum, analysts stay optimistic about BTC and the cryptocurrency market, predicting revivals. Analysts urge Bitcoin’s drops target to fill inefficiencies before an upward toward the $46,000 highs. Experts noted that BTC’s road to $44,000 is hurdle-free, supporting the upside case.
However, violating the support barrier of around $40,000 could trigger massive drops for Bitcoin. That might trigger downtrends towards $34,000. Further weakness would see the crypto targeting sell-side liquidity around the $30,000 mark.