Following the speech by Powell, the price of most cryptocurrencies dropped, with FLOW losing 11% and ETH falling by 8.5% over 24 hours. Besides, the value of Bitcoin declined by nearly 9% from the highs on the previous day, reaching a low of USD 19,920.
Traders recently reacted to aggressive comments from US Federal Reserve (Fed) Chairman Jerome Powell, causing Bitcoin (BTC) and other cryptocurrencies to drop.
The price of the pioneering cryptocurrency fell by 6.3% to USD 20,251.34, moving back to its weekly low of the previous days.
The Overall Crypto Market Suffers a Sharp Drop
The Federal Open Market Committee will meet in September to discuss whether it will raise rates by 50 or 75 basis points. According to Jerome Powell, the decision will depend on the incoming data and the evolving outlook.
The Fed chairman said that the successful control of inflation could slow economic growth for an extended period. He warned that interest rates would have to remain at those levels for a long time to achieve that.
The official predicted that consumers and companies would suffer the consequences while labor market conditions deteriorated. He added that bad debts would worsen if prices do not recover their stability.
The value of most crypto assets dropped after Powell gave his speech, with Flow (FLOW) losing 11% over 24 hours. The market capitalization of Ether (ETH), the second-largest cryptocurrency following Bitcoin, fell by 8.5%.
Bitcoin Might Face a Brutal September amid an Uncontrollable Crypto Space
While the price of BTC fell below USD 20,000, the value of ETH dropped below USD 1,500. The overall capitalization of the crypto market fell below USD 1 trillion, losing over 6.5%, due to a recent speech by the Fed Chairman.
Powell said that central banks would use their tools to curb inflation at its highest point in 40 years. He added that he expected the rise in interest rates to continue for a long time.
After his speech, the value of the S&P 500 dropped by an average of 500 points, the worst since mid-June. Besides, the price of Bitcoin fell by nearly 9% from the highs on the previous day, reaching a low of USD 19,920. Growing bearish sentiments are underway as September approaches, representing new lows for various assets.
September has been the most bearish month since 2013, except for 2015 and 2016. According to analysts, investors withdraw from their positions after returning from their summer holidays in September. However, the trend offers a little more diversification than in previous years.
Bitcoin is trading at around USD 20,244 and has accumulated a 5.6% loss over the last 24 hours. While its daily trading volume is above USD 391.21 billion, its market capitalization is about 387.35 billion, according to CoinGecko.
By Alexander Salazar
