Bitcoin price is starting to look choppy and the US Fed may make it worse

Posted: 1 December 2021 2:20 am
BTC 12-03 1800x1000

Bitcoin’s monthly losses currently stand at 7%.

  • Federal Reserve chair Jerome Powell recently noted that the ongoing issue of inflation could be more severe than previously imagined.
  • As a result of Powell’s comments, the crypto sector — along with the stock and commodities market — plunged yesterday.
  • A key technical indicator suggests that Bitcoin may dip as low as $44K before proceeding to hit a new all-time high.

After unexpectedly making a major push to the $57,500 mark a little over 12 hours ago, Bitcoin (BTC) has shown visible signs of correction. The world’s largest cryptocurrency by total market capitalization scaled to a local bottom of $56,200, only to rise a bit once again. At press time, BTC is trading for $$56,208.

This latest round of volatility seems to have been spurred by Federal Reserve chair Jerome Powell. Powell acknowledged that the looming issue of inflation may be more than just a “transitionary” problem, going as far as saying that major consequences of the recent money printing could become more visible in the near future. As a result of these comments, BTC, stocks and commodities plummeted.

CryptoQuant analyst Jan Wuestenfeld noted that over the last 24 hours, the US dollar index (DXY) has shown signs of a mild increment while the DOW, gold and other equities indexes pulled back visibly. Wuestenfeld added: “US dollar index appreciating on Powell remarks that the Fed might speed up taper (no matter how believable). Everything else going down. Gold included.”

How to buy Bitcoin

Bitcoin mining firm makes its way to the NYSE

As per a new filing made with the US SEC earlier this week, Adit EdTech Acquisition Corp — a special purpose acquisition company (SPAC) – revealed it would merge with Cincinnati-based Bitcoin mining company GRIID for a base valuation of around $3.3 billion.

As a quick refresher, SPACs are “blank cheque companies” that are meant solely to help facilitate the acquisition of third-party entities in a seamless manner. Once the deal concludes, GRIID will make its way onto the New York Stock Exchange (NYSE) under the ticker symbol GRDI.

In a recent presentation, GRIID revealed that it hopes to mine over 637 BTC by the end of 2021 with a total hash rate of 187 petahash per second (PH/s).

Is BTC’s future valuation still uncertain?

Despite Bitcoin hitting a relative high of $59K recently, independent analyst TechDev noted that Bitcoin’s Stochastic relative strength index (Stoch RSI) reveals that the flagship crypto may reset to a relative low of $44K before commencing on a fresh bull run, which may help take Bitcoin to a fresh all-time high.

Also, a few days ago, Jack Dorsey revealed that he was stepping down from his role of Twitter CEO to focus on BTC-centric activities. It will be interesting to see how the market responds to this news over the coming few days.

Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.

Disclosure: The author owns a range of cryptocurrencies at the time of writing.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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