The new year ushered in a positive phase for cryptocurrency enthusiasts after a rugged three-month period. However, the last quarter witnessed the usual pullback with Bitcoin (BTC) succumbing to a $10,000 drop after testing its resistance levels. The unexpected flare-up of the Greenland controversy by Trump contributed to the current week’s market sell-offs, an eventuality we had warned about on Sunday. So, what’s next in this volatile journey?
Crucial Moments for Cryptocurrencies
Today at 18:00, Powell is expected to testify at the Supreme Court hearing involving Cook. Trump had previously threatened Powell with legal action for not cutting rates, making today’s statements highly anticipated. Should Powell’s comments cast doubt on the Fed’s independence, the risk markets may react negatively.
Last year, Trump’s attempt to dismiss Cook was halted by the courts, with Cook remaining in position until the process was resolved. The courts sided with Cook, but following appeals, the matter ascended to the Supreme Court, prolonging a contentious saga.
Powell’s potential remarks on being pressured akin to Cook for not reducing rates could spell trouble for cryptocurrencies. If the court decision unfavorably impacts Trump, it may affirm the Fed’s independence and embolden members to make limited rate cuts. Conversely, a decision facilitating Trump’s stance could jeopardize the Fed’s autonomy and witness hawkish members’ dismissal, sparking chaos.
Current State of Cryptocurrencies
Following the sell-off led by Japanese bonds, treasury bonds have begun recuperating. Nonetheless, the selling spree by several European-based pension funds of U.S. bonds hints at a larger looming economic upheaval, unsettling investors. While Trump values stock market surges, his Greenland and high tariff rate obsessions strain the markets.
Trump is scheduled to meet EU leaders at 17:45 and subsequently confer with business leaders to attract more investment into the U.S. Though an announcement on Customs Tariff decisions is unlikely, there is a slim possibility by 18:00, with the actual announcement expected on February 20th. At present, BTC maintains the $88,000 mark as of this writing.
