• Jerome Powell, the Chairman of the US Federal Reserve, warned that the organization may increase interest rates more than previously expected.
• Bitcoin reacted to this news by dropping roughly $400 in minutes and slipping below $22,000.
• This marks a three-week low for BTC.
Powell’s Testimony to Congress
The US Federal Reserve Chairman Jerome Powell gave a testimony to Congress regarding the central bank’s upcoming monetary plans on Tuesday. Most experts believed that the Fed will not push the rates above 6%, yet Powell suggested that it’s preparing to increase them even more if necessary.
BTC Drops Below $22K
Bitcoin reacted with an immediate price slump when Powell’s warning was made public. The cryptocurrency dropped by over $400 in minutes and slipped below $22,000, marking a three-week low.
Anticipation of Stagnation
Prior to Powell’s testimony, most financial markets had calmed down in anticipation of his comments, especially crypto which had been stagnant around $22,400 for several consecutive days.
Expected Level of Interest Rates
According to Powell, recent economic data suggests that “the ultimate level of interest rates is likely to be higher than previously anticipated”. He also noted that if needed, further rate hikes are likely in order for the US Federal Reserve to reach its target goals.
Impact on Crypto Market
It is evident that this announcement from the Fed has impacted Bitcoin and other cryptocurrencies directly as they all experienced a short-term drop in prices soon after Powell’s comments were made public. It remains unclear whether this affects long-term growth prospects or not at this stage.