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Investing.com – The faltered on Tuesday, and threatens to fall further, after a hawkish intervention by the Fed chief in front of the US Congress, which further deteriorated the profile of the cryptocurrency.
At the time of writing, the is showing at $22,930, down 2.3% over 24 hours and almost 7% over a week.
Jerome Powell brings down Bitcoin
Recall that the Fed chief surprised with a more hawkish stance than expected in his testimony before the US Congress on Tuesday, suggesting that the pace of tightening could pick up again after a slowdown in February.
“As I mentioned, the latest economic data has been stronger than expected, suggesting that the final level of interest rates is likely to be higher than expected,” Powell said during his briefing. testimony before the Senate Banking Committee on Tuesday.
The Fed Chairman also said that “should the data package indicate that more rapid tightening is warranted, we would be prepared to increase the pace of rate hikes.”
As a result, the market is now pricing in a Fed hike of 50 basis points at the March 22 meeting, up from just 24% before Mr. Powell’s remarks.
Just as the prospect of the Fed slowing rate hikes boosted Bitcoin early on, the risk of the central bank eventually having to raise rates higher than expected naturally weighed on BTC and risky assets in general.
Crypto Traders’ Attention Turns to US Jobs
For the rest of the week, the focus of the markets, including the cryptocurrency market, will turn to US employment, with the ADP (EPA:) report on Wednesday and the NFP report on Friday.
Better-than-expected data would be a bearish factor, as a strong labor market complicates the Fed’s fight against inflation, and increases the need to hike rates.
However, given the high probability (77%) priced in by the market for the Fed to become more aggressive again, the data would need to be massively better than expected to be able to push these expectations even further, and therefore impact the market.
On the other hand, a bad surprise on the figures could more easily reduce the chances of a rate hike by 50 points on March 22, and therefore support Bitcoin.
>> Find the results of all important Bitcoin statistics as soon as they are published in the Investing.com Economic Calendar
The technical background for BTC/USD is deteriorating
Finally, from a chart perspective, yesterday’s fall in Bitcoin caused the cryptocurrency to break below an uptrend line that stretches from the January 18th low, as seen below:
If Bitcoin confirms a break below $22,000, the next potential support will be around $21,400, ahead of $21,000. Then, few supports can be spotted before the major psychological threshold of $20,000.
On the upside, we can spot short-term resistance near $22,500, ahead of the $23,000 threshold, where the 50-day MA currently stands. Next, the $24,000 area and then the yearly highs around $25,250 will come into focus.