Fed Chairman Jerome Powell will talk about cryptocurrencies along with the interest rate at the hearing on the ‘Semi-Annual Monetary Policy Report’ to be presented to Congress tomorrow. Powell’s statements can have an impact on Bitcoin, which is largely moving sideways.
US congress to talk cryptocurrencies tomorrow
Cryptocurrency will be the topic at the hearing on the Semi-Annual Monetary Policy Report to be presented to the US Congress. Fed Chairman Jerome Powell is among the attendees of the open session to be held on Tuesday, March 7, 2023. Powell’s comments on the crypto market could also come as an important development as the market awaits the Fed’s opinion on the rate hike plan for the rest of the year. The Fed Chairman’s comments follow his comments in September 2022, when he said there is a need for better regulation of the cryptocurrency market.
The meeting is quite significant given the recent series of regulatory sanctions actions by the US regulatory SEC on the crypto market. Crypto companies are increasingly facing difficulties working with US dollar-linked transactions due to the reluctance of US banking partners. Other issues, such as lack of regulatory clarity, continue to occupy the market agenda.
US Senator Bill Hagerty to discuss cryptocurrencies with Powell
The main topic of the hearing will be the Fed’s views on the state of the US economy and plans for how it will control inflation while raising interest rates. According to the trends around recent monthly rate hike announcements, Powell’s speeches after the FOMC meeting had a significant impact on crypto prices.
US Senator Bill Hagerty said he will discuss crypto with the Fed Chairman during the hearing. In this regard, if Powell clarifies his intentions on crypto regulation and related risks, there may be a slight chance of a slight drop in crypto prices, if not a full-fledged crypto crash. In his remarks during a panel discussion in September 2022, he warned that the next crypto crash could potentially have broader market implications.
Do Jerome Powell’s statements pose a risk to Bitcoin?
Market experts are on the lookout for any clues that Powell signals a renewal of policy tightening procedures. A declared tight hawkish Fed stance will hit risky markets like Bitcoin and could cause a rapid trend change.
As markets have not heard from Chairman Powell for over three weeks, they will be particularly eager to find out what the Fed Chairman has to say and whether there is a possibility of a larger rate hike for March. There is already market-wide speculation about a potential 50 basis point rate hike, which will be significantly higher than the last 25 basis points increase.
Should I buy now? What does the data say?
According to MacroCRG on Twitter, Open Interest (OI) for BTC has increased significantly by $100 million despite the price remaining stagnant. For those unaware, OI is a metric of the flow of money into a futures or options market. An increased open interest indicates that new money enters the market, and a decreasing open interest indicates that money leaves the market.
It is also worth noting that holding a long position in Bitcoin would be particularly dangerous if the price of Bitcoin fell at the beginning of the week while all existing longs were liquidated. As discussed earlier, this scenario would make much more sense if BTC falls after the Fed’s statements. As a result, if there is any price drop, it can offer investors a viable buying opportunity. As Kriptokoin.com, we have included what analysts expect from Bitcoin in the short term in this article.
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