On Saturday, 27 August, Bitcoin prices broke below $20,000, testing a range near $19,900 on the Binance exchange. Ethereum traded below $1,470.
At the time of writing, the first asset was trading around $20,120, the second around $1,485.
According to Coinglass, over the last 24 hours the volume of liquidations in the futures market exceeded $382 million. More than $167 million of this total was attributed to Ethereum. Exchanges largely forced the closing of short positions.
Earlier, the head of the United States Federal Reserve (Fed), Jerome Powell, said that to control inflation the central bank would need to keep interest rates high for some time.
Digital assets reacted negatively to the Fed chair’s remarks. A similar reaction was seen in the traditional stock market: for example, the Nasdaq fell almost 4% — the largest intraday drop since late June 2022.
The crypto investor and blogger Lark Davis noted that in the near term the Fed will not change its stance, and therefore the markets will suffer “even more pain”.
FED not pivoting any time soon. More pain will be inflicted on markets. #bitcoin #crypto #stocks
— Lark Davis (@TheCryptoLark) August 27, 2022
Economist Alex Krüger expressed a similar view. In his words, the Fed is more likely to push the economy into a recession than to permit excessive inflation. The expert advised users to hedge their positions and reassess them.
PA was a two-way mess. Bears won, v-reversal in place, bearish $BTC chart, weekend ahead, that was time to hedge and re-evaluate on Sunday.
— Alex Krüger (@krugermacro) August 26, 2022
As noted above, Peter Schiff, president of Euro Pacific Capital, predicted Bitcoin would fall to $10,000.
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