Cryptocurrencies extend the fall, attentive to news from the Fed

The market remains attentive to the statements this afternoon by the Chairman of the Federal Reserve, Jerome Powellwho expects news on the monetary policy of the United States.

The result of the decreases is a consequence of the increase in interest rates recently carried out by the United States Federal Reserve (FED), raising the indicator 25 basis points to 4.74%. Despite the drop in inflation in that country, which ended December 2022 at 6.5%, the world’s central banks continue to have concerns regarding the markets.

Even so, bitcoin posted its best January in eight years.

What is expected for bitcoin?

“Basically, the US Nonfarm Payrolls data have confused traders about the Fed’s monetary policy and believe that the Fed could continue with the process of raising interest rates for a few monthssince they see that the US labor market is in a strong position while inflation trends well above its desired level”, explains Naeem Aslam, chief market analyst at AvaTrade, to Bolsamanía.

Likewise, this expert points out that important American banks such as Goldman Sachs have increased the probability of a recession in the United States. Although it is true, Aslam points out, that the Fed “does not pay much attention to these blind predictions made by the banks, since, most of the time, they are delayed or adjusted after the fact”, the AvaTrade analyst warns that market sentiment is important for officials of the Federal Open Market Committee (FOMC).

“So today’s message is likely to be interesting and there is a strong possibility that it will cause greater volatility in the markets. If Jerome Powell remains calm and keeps the message inconsistent with the previous one, we could see a rally in the US stock market. This is a scenario that many expect, since they don’t think the Fed is going to surprise the markets with something new and risk their reputation“, Add.