Bitcoin has suddenly plummeted to below $60,000 per bitcoin after a billionaire bitcoin buyer revealed they had switched to bitcoin .
Bitcoin prices have struggled over the past month, falling nearly 15% as fears of a "true correction" spread .
Now, after one of the biggest bitcoin speculators claimed that the cryptocurrency could eventually replace the US dollar, Federal Reserve chairman Jerome Powell has warned of a “critical period " for the Fed, calling the deficit "unsustainable."
"The level of debt we have is completely sustainable but the path we are on is unsustainable," Powell said during the European Central Bank conference in Portugal, as reported by the Financial Times newspaper. , adding that the Biden administration is taking excessive risks by “running very large deficits at a time when we are at full employment” and said “you cannot sustain this level of debt during favorable economic conditions in the long run.
In May, Treasury Secretary Janet Yellen issued a dire warning about the massive $34 trillion U.S. public debt that some say could push bitcoin prices to $1 million in 18 next month .
Bitcoin, cryptocurrency and stock market traders have been closely watching the Fed for signs that it will start cutting interest rates in recent months, as analysts were forced to lower expectations about seven cuts in 2024 to just one or two.
"Ensuring monetary policy balance during this critical period is what I'm really thinking about at dawn," Powell said in response to a question about his top concern, AP reported .
Update April 7: Bitcoin prices and cryptocurrency markets have suffered a major crash in the past 24 hours, with bitcoin prices plummeting below $60,000 and wiping $200 billion from the cryptocurrency market combined since July 1. Ethereum Ethereum -10.3%and the rest of the main market are all down more than bitcoin, with ethereum rival solana, Telegram-linked toncoin and meme-based dogecoin all down almost 10% since this time yesterday.
“Bitcoin is breaking key technical and psychological levels at $60,000,” Markus Thielen, founder of 10x Research, wrote in email comments.
"This is an important level for bitcoin miners and spot bitcoin exchange-traded fund (ETF) buyers, and it also marks the bottom (support) of the three-month trading range. Prices could fall quickly more as support breaks and sellers scramble to find liquidity. Only uninformed traders will be willing to buy here. A break of this support could cause a sharp decline to the low 50,000s dollars."
Last month, the Federal Reserve kept interest rates unchanged and signaled it would cut only once in 2024, and would cut again in 2025. The Fed has been under pressure to cut interest rates after raising them Interest rates are at record levels after massive Covid-era stimulus spending and money printing caused inflation to skyrocket out of control.
"Powell said the US was back on a 'deflationary path' but added that more data was needed before the Fed would consider cutting interest rates," Russ Mould, chief investment officer at AJ Bell, said in comments via email. "The latter phrase sounded a bit like a broken record to the markets, so the most important part of Powell's speech was the mention of deflation, because investors understood that to mean there was Stronger reasons to cut interest rates soon."
All eyes are now on the Fed's June meeting minutes released on Wednesday and Friday's jobs report, which could "reinforce" expectations for a September rate cut if The report shows that hiring has slowed.
"If Friday's weaker-than-expected jobs report comes in, it will likely strengthen the case for a cut," Michael Brown, senior research strategist at Pepperstone, told MarketWatch. interest rate, which the market thinks is about 70% likely - is probably a little "low" .
The long-term high interest rate environment has triggered warnings from analysts at the world's largest asset manager BlackRock, who said an "unprecedented" scenario is unfolding that could impact affects bitcoin price and cryptocurrency market .
"We see central banks forced to maintain interest rates above pre-pandemic levels to address persistent inflationary pressures," said analysts at BlackRock, which has helped fuel the price boom. bitcoin this year by leading the bitcoin spot exchange-traded fund (ETF) revolution on Wall Street , wrote in a report .
