Bitcoin enthusiasts all over the world have been nervously holding their breath as the crypto market dips below the $22,000 mark for the first time in weeks. The recent slump in BTC's price is likely due to the announcement made by the US Federal Reserve regarding its plans to increase interest rates. Chairman Jerome Powell indicated that the organization is prepared to take drastic measures if necessary, leading to a flurry of speculation among investors.
The Fed Chair's testimony to Congress has surprised many experts, as the central bank may increase interest rates more than anticipated. Powell cited stronger-than-expected economic data as the primary reason for the change in policy. This unexpected news caused a break in the cryptocurrency market's stagnation, leading to a bearish outlook for BTC and the broader market. The total market valuation has dropped by over 8% in the past seven days.
Silk Road's Bitcoins on the Move
It’s looking even hairier for Bitcoin as some of Silk Road's bitcoins have been on the move. On-chain data reveals that a Bitcoin wallet address associated with the US government moved approximately 49,000 BTC yesterday. The sum is worth roughly $1.08 billion at the time of writing, which is an astronomical amount! The government seized the bitcoins from Silk Road exploiter James Zhong in November 2021, and they have decided to move the funds to different addresses.
It's unclear what the government intends to do with the bitcoins they seized, and this has caused a lot of speculation on Twitter. Some are suggesting that the Department of Justice might be planning to sell the bitcoins, but historically, the US government has opted to liquidate its bitcoin holdings through public auctions. Whatever the case may be, it's clear that the crypto market is in for some volatility in the coming days.
Impact on Bitcoin's Price
The news of the Fed's interest rate hike plans and the movement of Silk Road's Bitcoins have had a negative impact on Bitcoin's price, with the cryptocurrency experiencing a slump in value. However, the long-term impact remains to be seen, as Bitcoin has shown resilience in the face of market fluctuations in the past.
Investors and traders in the cryptocurrency market will be watching closely for any further developments that may impact Bitcoin's price. With announcements expected from the US in the coming days, it's likely that there will be further fluctuations in the market.
Bitcoin Price Action
The “curse” of the $25K barrier strikes again as Bitcoin suffers a massive dip after retesting the resistance level for the first time since mid-August 2022. The benchmark cryptocurrency has shed about 12% since failing to topple the $25K resistance, breaching the $22K monthly low.
That said, there should be a strong bullish presence around the $21.7K pivot top, where BTC could see a ramp effect triggered. In the meantime, expect to see sideways persistence in the near term. How do you think this will play out?
BTC Statistics Data
BTC Current Price: $22,000
BTC Market Cap: $425.2B
BTC Circulating Supply: 19.3M
BTC Total Supply: 21M
BTC Market Ranking: #1
This article should not be taken as financial advice. It is essential to conduct research before making any investment decisions.