“Quick austerity is appropriate” Bitcoin plunged 7% at one time at US Powell’s word… Is a ‘black weekend’ coming?
The rise of Bitcoin was halted after the US Federal Reserve Chairman Jerome Powell’s remarks about accelerating austerity measures. The cryptocurrency market is generally weak, with Bitcoin retreating to the $40,000 level. Concerns about a ‘black weekend’ are high due to the unfavorable market atmosphere.
According to CoinMarketCap, a cryptocurrency market information site, as of 10:50 a.m. on the 22nd, the price of 1 BTC (Bitcoin unit) was $4,470.47, down 2.47% from 24 hours ago.
At one point in the morning, it fell to $40,110, increasing the decline to 6.9% from the previous high. On the Korean cryptocurrency exchange Bithumb, as of 10:50 am on the same day, 1 BTC was trading at 50,556,000 won, down 3.89% from 24 hours ago. Since cryptocurrency is priced on a per exchange basis, even the same type of virtual currency has a different price depending on the exchange.
Analysts say that the US Federal Reserve (Fed) once again announced a ‘big step’ to raise the key interest rate by 0.5 percentage point, giving a big shock to the cryptocurrency market. When interest rates are raised, virtual currencies and stocks, which are risky assets, are sold and safe assets are purchased. “Inflation is now close to three times the Fed’s target of 2%,” Powell said at the International Monetary Fund’s general meeting on the 21st (local time). 50 bp (1 bp = 0.01 percentage point) will be considered at the meeting in May,” he said.
There are voices in the market calling for caution about new investments. It is analyzed that the stability of the cryptocurrency market has weakened as the overall trading volume has bottomed out, making the structure vulnerable to external shocks. In particular, there is a tendency to couple (synchronize) with tech stocks, so if other variables such as the collapse of Netflix act additionally, it is also pointed out that a ‘black weekend’ in which the market price will drop sharply may come. In fact, Bitcoin has been plagued by a ‘black weekend’ jinx in which the price drops significantly over the weekend in a bear market. Cointelegraph, a media specializing in virtual assets, diagnosed that “the liquidity of the virtual asset market is decreasing and there are concerns about a sudden deterioration in the market price due to a decrease in the number of orders on some exchanges.”
Investor sentiment for Bitcoin also contracted slightly compared to the previous day. According to the ‘crypto fear and greed index’ estimated by Alternative, a cryptocurrency data provider, on the 22nd, the index recorded 26, down 1 point from the previous day, maintaining the ‘fear’ stage. The index closer to 0 indicates extreme fear in the market, and closer to 100 indicates extreme optimism.
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