《Powell's Early Morning Speech Triggers the Collapse of the Cryptocurrency Market: Reasons and Outlook》
After Powell's speech in the early morning, the cryptocurrency market immediately faced a collapse. Below is a summary of the reasons:
The impact of Powell's remarks cannot be ignored; he emphasized the Federal Reserve's confidence in achieving its inflation targets, pointed out that the tightening policies have taken effect, and discussed labor market changes and the timing of policy adjustments.
This speech led to a positive reaction in the stock market, but it brought a strong shock to the cryptocurrency market.
The cryptocurrency market already faces many issues, such as the dramatic decline of LUNA and the phenomenon of excessive collateralized lending in the DeFi sector, along with high-leverage investments and misappropriation of funds. These factors have plunged institutions into a liquidity crisis, triggering a death spiral of liquidations and exacerbating market panic.
Regulatory factors are also significant; the U.S. SEC has launched an investigation into the trading situation on the Coinbase platform, which has greatly undermined market confidence.
From an overall perspective, the cryptocurrency market is inherently highly volatile, and the uncertainty of regulatory policies, along with differing attitudes towards cryptocurrencies around the world, undoubtedly increases market instability.
Despite the many severe challenges facing the cryptocurrency market, the underlying blockchain technology has vast application prospects and is expected to foster more use cases in the future.
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