Bitcoin’s Wild Ride
On March 22, Bitcoin (BTC) experienced severe volatility that would make a roller coaster look like a kiddie ride. Amid hints from the U.S. Federal Reserve about possibly pausing interest rate hikes, traders scrambled as the price teetered significantly. The anticipated 25 basis points hike sent BTC/USD into a frenzy, with sharp fluctuations marking the hour.
Powell’s Press Conference: A Shot of Espresso for the Market
Fed Chair Jerome Powell, in a press conference that played out like a soap opera, downplayed the alarm bells ringing from the ongoing U.S. banking crisis. Using the phrase “may” instead of “ongoing” regarding future policy shifts, he hinted at a potential slower pace of rate hikes. His comments about credit conditions suggested tighter times ahead, yet he kept the market guessing.
“It is too soon to determine the extent of these effects.” – Jerome Powell
BTC’s Misadventures
As the Fed’s statement reverberated through trading floors, Bitcoin plummeted to local lows of $27,867 only to rebound above $28,000. This situation resembled a game of hot potato, with traders juggling their positions amid the flurry of changes. However, the notion of a trip to $30,000 remained just a tantalizing fantasy for many dreamers.
What the Analysts Say
Market analysts turned into prognosticators, with some referring to Powell’s Fed as “hawkish” for prioritizing inflation above the serious banking dramas playing out. “The Fed have shown thus far, that they are committed to rates higher for longer + inflation as enemy #1,” tweeted one commentator. In simple terms: the Fed’s approach was tight enough to give Bitcoin jitters.
Liquidation Mayhem
If you thought the market was crazy enough, the numbers on liquidated positions were even wilder. Over the day, a colloquial $36 million worth of crypto liquidations transpired, leaving hundreds hanging on the edge of their seats. As analyst Matthew Hyland stated, it was a circle back to square one: “Shorts liquidated then longs liquidated. Back to the same price we were an hour ago.”
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