Bitcoin, Ethereum, Dogecoin Down As Fed's Powell Dials Up Hawkish Tone: Why Cryptos Could See A 'Strong Recovery'

Zinger Key Points
  • Bitcoin plunges 5.7% from near the $42,800 intraday high
  • U.S. Federal Reserve Chair Jerome Powell Says 'absolutely essential' to restore price stability
  • Capital inflow a positive for cryptos, according to Glassnode co-founders Jan & Yann

Bitcoin traded above the psychologically important $40,000 mark even as the apex coin and other major peers were in the red over 24 hours leading up to Thursday night. The global cryptocurrency market cap shrank 2.6% to $1.9 trillion. 

Price Performance Of Major Coins
Coin 24-hour 7-day Price
Bitcoin BTC/USD -2.4% 1% $40,430.63
Ethereum ETH/USD -3% -1.5% $2,984.80
Dogecoin DOGE/USD -3.3% -5% $0.14
Top 24-Hour Gainers (Data via CoinMarketCap)
Cryptocurrency 24-Hour % Change (+/-) Price
Decred (DCR) +14.5% $70.37
Tron (TRX) +13.4% $0.0712
Kyber Network Crystal v2 (KNC) +8.2% ​​$4.75

See Also: How To Get Free NFTs

Why It Matters: Bitcoin touched an intraday high of $42,893.58 but could not sustain upwards momentum, trading 5.7% lower from those levels at press time. Ethereum was below the $3,000 mark. 

Risk assets in general traded lower on Thursday, with the S&P 500 and Nasdaq shedding 1.5% and 2.1%, respectively. 

“The Nasdaq has had a more turbulent week which bitcoin has managed to shrug off; maybe a sign of it distancing itself from the link between the performance of the two,” said OANDA analyst Craig Erlam, in a note. 

“Whether it can sustain that we’ll see as there’s one thing both still have in common, they’re viewed as risky assets, albeit with bitcoin very much at the higher end of the scale."

On Thursday, U.S. Federal Reserve Chair Jerome Powell said it was “absolutely essential” to restore price stability, according to a CNBC report

“We’re really going to be raising rates and getting expeditiously to levels that are more neutral and then that are actually tight ... if that turns out to be appropriate once we get there,” said Powell. 

The statements from Powell could imply that the U.S. central bank may opt for a more aggressive 50 basis point rate hike instead of a 25 bps increase.

Irrespective of headwinds such as rising interest rates and the ongoing war in Eastern Europe, money is flowing into cryptocurrencies. This is setting the stage for a “strong recovery,” according to Glassnode co-founders Jan & Yann.

“$17bn VC [Cryptos] investments and +1k deals in 2022. This year has seen the highest median deal size at $4.5mn,” tweeted the Glassnode co-founders.

On the Ethereum side, the cryptocurrency’s address activity surged this week, according to Santiment. The financial market data platform noted that Wednesday’s 592,000 addresses were the “highest number of unique interactions in over a month.” 

Social discussions surrounding the second-largest cryptocurrency have hit their highest level in two months, tweeted Santiment. 

Read Next: Binance Limits Crypto Services In Russia: What You Need To Know

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