‘Critical’ Fed Warning Raises Major Alarm Over $50K Bitcoin Price Drop as $200 Billion Wiped from Ethereum, XRP, Solana, Crypto

Update 07/04 below. This post was originally published on July 03

Bitcoin
Bitcoin
suddenly fell back to $60,000 per bitcoin after a billionaire who had been buying bitcoin revealed he had changed his mind.

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The price of bitcoin has been struggling with a nearly 15% decline in the past month as fears of a “real correction” intensified.

Now, after one of bitcoin’s biggest bulls said the cryptocurrency could eventually replace the US dollar, Federal Reserve Chairman Jerome Powell has warned of a “critical period” for the Fed, calling deficit levels “unsustainable.”

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Forbes‘Landmark’ Bitcoin Bill Introduced to Congress After Cryptocurrency Price CrashBy Billy Bambrough

“The level of debt that we have is completely sustainable, but the path that we are on is unsustainable,” Powell said at a European Central Bank conference in Portugal, the agency reported. Financial Timesadding that the Biden administration is taking excessive risks by “running very large deficits at a time when we have full employment” and stating that “you can’t sustain those levels in good economic times for very long.”

In May, Treasury Secretary Janet Yellen issued a dire warning about the $34 trillion U.S. debt spiral, which some believe could push bitcoin’s price to $1 million in the next 18 months.

Bitcoin, cryptocurrency and stock market traders have been closely watching the Federal Reserve for signs of rate cuts in recent months, with analysts forced to lower expectations of about seven cuts in 2024 to just one or two.

“Finding the right balance of monetary policy in this critical period is what I’m thinking about this morning,” Powell said in response to a question about his biggest concerns, AP reported.

Update 07/04: Bitcoin price and the cryptocurrency market have suffered a major crash in the past 24 hours. Bitcoin price has fallen well below $60,000, and the combined cryptocurrency market has lost $200 billion since July 1. Ethereum and the rest of the mainstream market have seen bigger declines than bitcoin. Ethereum rival Solana, Telegram-linked toncoin, and meme-based dogecoin are all down almost 10% since yesterday.

“Bitcoin is breaking through significant technical and psychological levels at $60,000,” Markus Thielen, founder of 10x Research, wrote in emailed comments.

“This is a key level for bitcoin miners and exchange-traded fund (ETF) buyers in the bitcoin market, and it also generally marks the lower boundary (support) of a three-month trading range. Price declines could accelerate as support is broken and sellers scramble to find liquidity. Only uninformed traders are willing to buy here. A break of this support could trigger a sharp decline to the low $50,000s.”

The Federal Reserve left interest rates unchanged last month and signaled it would make just one cut in 2024, with more to come in 2025. The Federal Reserve has been under pressure to lower interest rates after they rose to record levels in the wake of massive Covid-era stimulus spending and money printing that sent inflation spiraling out of control.

“Powell said the U.S. is back on a ‘disinflationary path,’ but added that more data is needed before the Fed considers cutting interest rates,” Russ Mould, chief investment officer at AJ Bell, said in emailed comments. “That last sentence sounds a bit like a broken record to the market, so the most important part of Powell’s speech was the reference to disinflation, as investors interpreted it to mean there was a stronger case for an imminent rate cut.”

Eyes now turn to Wednesday’s minutes of the Federal Reserve’s June meeting and Friday’s jobs report, which could solidify expectations for a September rate cut if it shows a slowdown in job growth.

“If a weaker-than-expected employment report were to be released on Friday, it would likely further strengthen the case for a cut, which markets are giving about a 70% chance of, perhaps a bit on the low side,” said Michael Brown, senior research strategist at Pepperstone. Market watch.

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Forbes‘Replace the US Dollar’ – Legendary Tech Billionaire Makes Shocking Bitcoin Prediction Amid Ethereum, XRP, Crypto Price SwingsBy Billy Bambrough

Analysts at BlackRock, the world’s largest asset manager, have issued a warning that the persistence of higher interest rates for an extended period of time is associated with an “unprecedented” scenario that could affect the price of bitcoin and the cryptocurrency market.

“We see central banks being forced to keep interest rates higher than they were before the pandemic to cope with persistent inflationary pressures,” analysts at BlackRock, a firm that helped fuel this year’s bitcoin price boom by leading the bitcoin ETF revolution on Wall Street, wrote in a report.