The recent crypto market crash has sparked concerns with Bitcoin, Ethereum, XRP, and the Dogecoin price witnessing significant declines. Notably, this latest downturn came following the Federal Reserve Chair Jerome Powell’s testimony before the Senate Banking Committee.
Recent data shows that Bitcoin, Ethereum, XRP, and Dogecoin have suffered significant price declines following a crypto market crash. This occurred following Jerome Powell’s testimony before the Senate Banking Committee, which was bearish for risk assets.
Powell said there is no need to hurry to adjust the current economic policy. He further remarked that they want to make more progress on inflation before pivoting.
These statements from the Fed Chair again highlighted the hawkish stance that the US Central Bank is currently adopting in terms of its monetary policy. This is bearish for risk assets like Bitcoin, Ethereum, XRP, and Dogecoin since the Fed is unlikely to cut interest rates anytime soon.
It is worth mentioning that Powell had made some positive remarks for the market, including affirming the Central Bank’s commitment to end debanking. He also revealed that they don’t plan on making a Central Bank Digital Currency (CBDC).
These positive remarks from Jerome Powell weren’t enough to stop the crypto market crash, as Powell’s hawkish speech quickly sparked a wave of sell-offs. As a result, the Bitcoin price slipped below the $96,000 support level and is at risk of falling below the $95,000 mark ahead.
Coinglass data shows that over $200 million has been liquidated from the crypto market in the last 24 hours, with long positions taking the most hit.
Bitcoin, Ethereum, XRP, and the Dogecoin price have also dropped because of the CPI inflation, which came in higher than expected. The CPI data shows that inflation rose to 3% in January year-on-year, which was higher than expectations.
Following the release of the CPI report, traders are now betting that the next Fed rate cut won’t come until December as against the earlier predictions of October. This development is bearish for risk assets as investors are less likely to allocate so much capital to these assets whenever the Fed adopts a quantitative tightening (QT) policy.
US President Donald Trump has also contributed to the crypto market crash with his latest tariffs plans after he took office on January 20. Yesterday, Trump announced a 25% tariff on aluminum and steel imports.
Meanwhile, the US president has promised to impose certain tariffs on the European Union, to which the EU has also responded that it will retaliate with tariffs of its own. These developments have raised concerns about trade wars, which are bearish for the crypto market. China already retaliated by imposing taxes on certain US imports.
As Coingape reported, Trump revealed last week that he plans to announce ‘reciprocal tariffs‘ this week on countries that have imposed unfair taxes on the US. This move could also negatively impact the market and lead to further declines.
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