Ethereum, Bitcoin Price Below $3,500 and $70,000 After Powell’s Speech

The Bitcoin price continues to hover around $70,000, while Ethereum is hovering around $3,500, as the price moves above and below these major levels. After the second attempt at the upside during the weekend which failed to push BTC and ETH to new record highs, we have been seeing some consolidation for several days, which is not a bad thing as as they’re consolidating gains.

Bitcoin Daily Chart – Still Holding Above the 20 SMA

Today, while some markets are closed for Easter, but Forex and the cryptocurrency market remain active. Cryptocurrencies often serve as indicators of risk sentiment, and today’s 2% drop in BTC may suggest some bearish sentiment, especially following Jerome Powell’s comments in San Francisco.

Powell’s remarks largely echoed the recent script, emphasizing the strength of the economy and the expectation of robust growth. He acknowledged that risks are two-sided and reiterated the Fed’s commitment to monitoring economic data closely. Importantly, Powell did not explicitly mention any plans for rate cuts this year, although he was not directly questioned about it during his speech.

BITCOIN was trading at $70,000 before Powell’s comments, but experienced a drop afterward. While some of this decline may have been attributed to stop-loss orders triggering amidst heightened volatility, Powell’s remarks likely contributed to the negative sentiment in the cryptocurrency market.

Ethereum Chart Daily – The 20 SMA Acts As Resistance Here

Ethereum peaked above $4,000 earlier this week, but it found support at the 50 SMA (yellow) on the daily chart and we saw a bounce off that moving average. But the 20 SMA (gray) has turned into resistance, stopping ETH/USD from making further gains and the price has been trading mostly above and below $3,500. We might see a retreat lower, but the 50 SMA will likely act as support again, which would be a good place to go long from, but we already have a buy Ethereum signal active.

Traders were expecting some volatility from the PCE report and Federal Reserve Chair Jerome Powell’s comments, which was speaking at the San Francisco Fed in a moderated discussion with Marketplace host Kai Ryssdal. But, nothing changed and the price action continues to be slow for Easter holidays.

Federal Reserve Chair Jerome Powell Speech at the San Francisco FED

1. Response to Data:
   • Powell noted that today’s data was “good to see” but emphasized the importance of obtaining more positive readings on inflation, akin to those seen last year.
   • He highlighted that the Fed did not overreact to favorable data in the second half of last year and reiterated the stance of not overreacting to the last two months’ data.
2. Economic Outlook:
   • Powell acknowledged that risks are two-sided, emphasizing the significance of the initial interest rate cut as a pivotal decision.
   • He expressed confidence in the strength of the economy, citing very strong growth, and emphasized the lack of urgency in implementing rate cuts.
3. Monetary Policy Approach:
   • Powell discussed the Fed’s readiness to react to various data scenarios, indicating a balanced approach to monetary policy.
   • He mentioned scheduling calls with every voting and non-voting member before each meeting, underlining the importance of communication and consensus-building.
4. Inflation Expectations:
   • Powell stated that if inflation does not decline as expected, the Fed would prolong holding rates, with no immediate plans for hikes.
   • He expressed uncertainty regarding the eventual level of interest rates post-pandemic, suggesting rates may not return to pre-pandemic lows.
5. Labor Market and Balance Sheet:
   • Powell highlighted that unexpected weakness in the labor market could prompt a policy response but noted that slowing balance sheet runoff is unrelated to economic views.

Powell’s speech had a a slightly more hawkish tone. He hasn’t said if they plan to decrease interest rates this year. Overall, Powell’s speech emphasizes the Fed’s cautious approach to monetary policy, emphasizing the need to maintain positive inflation readings and remaining flexible in response to economic developments.

Bitcoin Live Chart