The price of ETH fell by 0.57% to US$2,857, while the price of BTC/USD rose by 0.68%, changing hands to US$39,739 at around 10:30 Eastern Time. Nonetheless, after correcting downwards from their respective intraday highs of US$2,391 and US$40,925, both currency pairs reached their current levels.
After Tesla’s Elon Musk, Ark Invest’s Cathie Wood and Twitter’s Jack Dorsey expressed support for Bitcoin, traders increased their exposure to the cryptocurrency market B word meeting last week.There has been more tailwind in speculation about Amazon’s plan to accept BTC as payment, and there are rumors that the retail giant Was later rejected.
Ether, its 30-day correlation with Bitcoin It rose in tandem with Bitcoin, at 89%. Their synchronized price trend continued until the New York trading session on Wednesday, as the market waited for the Fed to announce its reduction plan.
Talk, talk, taper
U.S. central bank officials will conclude the two-day policy meeting on Wednesday and are scheduled to issue a statement at 14:00 EST. Investors will pay attention to Chairman Jerome Powell’s signal on how and when the Fed will begin to unwind its asset purchase program, as well as any potential changes in their perceptions of inflation.
Specifically, the US consumer price index soared to 5.4% year-on-year. Therefore, according to a poll conducted by the U.S. government, as many as 54% of Americans believe that the U.S. economy is in poor condition. Associated Press-NORC Public Affairs Research Center.
But the Fed called it “temporary,” thereby obliterating higher consumer prices. Therefore, Powell testified in Congress earlier this month that the central bank will continue its $120 billion monthly bond purchase program, raising concerns that this will lead to a further spike in inflation. Especially in the housing sector.
Brian O’Reilly, director of market strategy at Mediolanum International Funds, pointed out that there is no sign of inflation cooling in the next few trading days, so the Fed may begin to pay attention to rising consumer prices, if it does not suspend their bond-buying process. He added:
“There won’t be any changes, but they are at a stage where they are starting to talk about gradual reduction.”
What will happen next with Bitcoin and Ethereum?
The biggest weakness of the Ethereum and Bitcoin markets is that if the Fed’s liquidity is not expanded, their valuations may not be maintained.
At the same time, the strong foundation is that a large amount of capital enters the market off-market. DataTrek Research Report Note that the retail investors of Robinhood alone hold USD 400 billion to enter the market during the next big drop. FRED’s retail money fund also pointed out that retail investors hold more than US$1 trillion, compared with US$643 billion in 2015.
“We are living in an unprecedented period of fiscal and monetary stimulus,” famous Anthony Pompliano is a well-known crypto advocate and a partner at Pomp Investments, in a note he recently gave to clients. He added that compared with holding cash or negative-yield assets, investors will do better by investing money in financial instruments. He says:
“If our government and economic organizations continue to intervene to eliminate the bear market and prohibit market adjustments, the market will only get higher and higher over time.”
Given that 20% of the American public knows enough about BTC to hold it, and at the current growth rate, #Bitcoin Will become political suicide in the next few years.
— Willy Woo (@woonomic) July 28, 2021
Tim Frost, CEO of Yield App, a DeFi wealth management platform, weighed analysts’ concerns about the prospects for a renewed rise in Ethereum and Bitcoin.
He told Cointelegraph that after a “short rally,” the market may resume its downtrend, where Bitcoin fell to a low of $20,000 while Ethereum went lower, adding:
“Altcoins have a long way to go to revive. The cryptocurrency fear and greed index is still very biased towards fear-in fact, it has been tilted in this direction for the longest time in history. This is not the beginning of a new bull market. It’s like taking a nap with the little bear.”
The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading action involves risk, and you should conduct your own research when making a decision.