"BTC seems to be going down again, what do investors think?"
Following the Chairman of the Federal Reserve (Fed) of the United States (US) Jerome Powell stated in front of Congress during the presentation of the monetary policy report that inflation is still high, the cryptocurrency Bitcoin (BTC) plunged to the level of $21,940 but is now recovering slightly at $22,200.
Powell signaled that the central bank will increase interest rate hikes again as economic data published earlier still show that the United States (US) economy is still strong and absorbing pressure.
The overall market also fell by 1.3%, while the second largest crypto Ethereum (ETH) slipped to $1,540 before rebounding to $1,570.
It is widely known that most cryptos are largely down, in line with the equity market which also struggled due to Powell's remarks, with the S&P 500 down 1.5%, the Dow Jones Industrial Average (DJIA) 1.7% and the Nasdaq Composite 1.2%.
Powell said interest rates are likely to be higher if the latest economic data comes in stronger than expected and he may raise interest rates by 50 basis points compared to the more dovish 25 basis points.
According to David Brickell, director of institutional sales at crypto liquidity network Paradigm, the price of cryptocurrencies has the potential to jump higher if the Fed lowers interest rate hikes.
While the chief investment officer at Hashdex crypto asset manager Samir Kerbage said the crypto market can recover when the Fed's interest rate hike is below 50 basis points, but if not then it will have a negative impact on digital assets.
While BTC could still maintain its momentum following Powell's presentation, the digital asset could experience selling pressure going forward, said Edward Moya, senior market analyst at Oanda.
He further added that the crypto market may make new lows in 2023 if the Fed still wants to raise interest rates aggressively.
