- Bitcoin breaks key support level to trade below $27k.
- U.S. Federal Reserve Chair Jerome Powell has hinted that the Central Bank could be forced to ease back on interest rate hikes.
Bitcoin (BTC) breaks crucial support level to trade at $26,752.39 after falling by 1.9 percent in the last seven days. Ethereum also started the Asian trading week with a 1 percent fall to trade at $1,804.53. Interestingly, Bitcoin spent almost the whole of last week hovering within the price range of $30k and $27k. Joe DiPasquale, CEO of BitBull Capital, believes that the prize is merely following expectations.
Bitcoin has corrected to levels between $27k and $25k. This is where we’d like to see some consolidation before a retest of $30k in the coming days. While the market may not rally in the near term, the price action is following expectations as we witness consolidation during bearish sentiment.
Analysts have linked this mini fall to the recent comment of U.S. Federal Reserve Chair Jerome Powell who claimed that the Central Bank may be forced to reduce interest rates following the banking sector crisis. According to Powell, credit stress may cause the interest rate to be lower than initially thought. He had earlier hinted that the assessment of the upcoming interest rate decision would be an ongoing one.
The financial stability tools helped to calm conditions in the banking sector. Developments there, on the other hand, are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring, and inflation. As a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals.
Bitcoin Investors Expect a Pause in Interest Rate Hikes
According to the CME FedWatch tool, 79 percent of traders expect a pause in interest rate hikes during the next policy meeting in June. Others also expect a cut later this year. Edward Moya, senior market analyst at foreign exchange market maker Oanda, observes that the debt limit struggle which ended abruptly forced Bitcoin to hold on to its gain as Powell hinted at the consideration of the Fed’s tightening campaign.
Over the weekend, Tornado Cash’s TORN became a victim of vote fraud. This caused the token to fall by 40 percent from $5.76 to 3.59. As of press time, the asset had recovered most of its lost value to trade at $4.59.
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Washington, D.C.-based political watchdog Open Secrets has also stated in a report that the first quarter of federal lobbying topped $1 billion for two consecutive years. The likes of healthcare, finance, real estate, and energy led the rank. The report further discloses that $4.1 billion was spent on federal lobbying efforts by industries and activist groups.
Lobbying by crypto majors was reportedly high in the first quarter of 2023 with Tether spending $270,000. In the first quarter of 2022, Tether spent $100,000 lobbying. The Blockchain Association reportedly spent $490,000 lobbying in the first quarter of this year from the $460,000 spent in the same period last year. Stablecoin issuer Paxos saw its lobbying spend jump from $50,000 in Q1 2022 to $80,000 this past quarter.
The crypto market currently looks bearish as Bitcoin is largely expected to bounce back to $30k. However, any attempt to break another support level could send the asset down to $25k.