Cryptocurrency investors We have been talking for days that the most important event of this week for the Fed is the Fed’s statements. What was feared came true and the expected scenario was a serious slowdown in interest rate cuts. On the other hand, Powell’s Bitcoin $104,049.2 Resti on the subject is one of the biggest reasons for the general decline in cryptocurrencies.
Powell and Bitcoin Statement
Who will serve as the head of the Fed for at least 2 more years Powell He cannot be dismissed like other public administrators. As a matter of fact, Trump acknowledged that it was not right to dismiss Powell for economic stability and said that he would allow him to stay where he is until his term ends in 2026.
Moreover, it is not that easy to dismiss Fed Presidents. If Trump wanted to do this, it would probably go to court and Powell would have a strong chance of winning. Beyond all this today Powell He said that the institution will not accumulate Bitcoin. Stating that he is openly cold towards this idea, he underlined that a law is needed for such a thing to happen.
While Republicans are strong in both the Senate and the House of Representatives, can they pass this legislation despite the Fed’s resistance? This may not be a 50% chance because some Republicans also turn their noses up at this issue. If Trump cannot convince Republicans about the Bitcoin reserve business by saying “this will definitely happen”, the likelihood of the law being passed is very low.
The good news is BTC Despite the decline, following Powell’s statements, Trump may say in the coming hours, “No, I do not accept this, we will create the Bitcoin reserve as promised, despite Powell.” Since he will take the seat on January 20, the markets, which have priced in the expectation, may start a rapid new rise wave following these statements. Or Trump takes the microphone and says “If the Fed says it won’t happen, he must know something”, does not insist, and eventually BTC returns to $90,000 levels? If we could see the future, this would be a great trading opportunity.
Why Are Cryptocurrencies Falling?
With BTC falling altcoins also lost value rapidly. ETH It faced the risk of losing $3,800 and falling to $3,100. Moreover, we also mentioned that since the 0.036 level in the BTC parity is about to be lost, this situation is a significant obstacle to new resistance tests of $ 4,100.
After today’s announcements we have this and why crypto is falling;
- There will be 1 or 2 interest rate cuts in 2025.
- The Fed is not confident that its 2% inflation target will be achieved over 2 years.
- Powell stands against the BTC reserve.
- If the decline in inflation does not continue, there is a risk of an interest rate increase (for 2026).
- If employment remains strong and inflation does not fall, two interest rate cuts (base scenario) may not be made next year.
- From the days when we talked about the speed of interest rate cuts, we have come to the days when “the interest rate cut pause is about to be finalized”.
- There is a probability of over 90% that there will be no interest rate cut in January and the interest rate will remain constant.
- The dollar index reached a record level after months.
- US stock markets are declining. (In closing)
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
