Echoes of Powell's comments interrupted crypto's rise

Powell's speech on Thursday night weighed on US markets and echoed on cryptocurrencies, leaving an emerging breakaway from a critical support line.

Cryptos go down

A decline in US stock indices added to the negative impact amid a speech by Fed Chairman Jerome Powell, who said he could aggressively tighten monetary policy at the May meeting.

Bitcoin has lost 2.3% to $40,700 in the past 24 hours. Ethereum is down 2.4%, while other leading altcoins in the top 10 are down 0.4% (Terra) to 4.7% (Polkadot).

According to CoinMarketCap, total cryptocurrency market capitalisation fell 2.2% overnight to $1.88 trillion. Bitcoin's dominance index fell to 41.0% due to the first cryptocurrency's tight link to pressured stock markets. The cryptocurrency Fear and Greed Index fell 1 point to 26 on Friday, after three days at 27 points (fear).

Investors’ record profit

Earlier on Thursday, Bitcoin tested the highs of the past 11 days, around $43,000. During the day, BTCUSD crossed the 50-day average, which is often an indicator of a medium-term trend, but failed to close above it.

Due to pressure on the stock market, the first cryptocurrency fractured into a bullish scenario with a breakaway from the support line and a trend reversal. However, it is too early to completely write off the strength of the bulls, while the first bitcoin manages to hold above support.

FxPro Analyst team emphasised that US crypto investors made a record profit of $46.9bn in 2021, followed by the UK with $8.1bn and Germany with $5.8bn. In Russia, investors earned $4.3bn.

According to the Bank of Canada, most Canadians investing in bitcoin lack financial literacy. Meanwhile, more knowledgeable investors have little or no exposure to BTC.

About the author

Alex Kuptsikevich is a financial market professional with 16-years’ experience and a senior financial analyst at FxPro. He is the author of daily reviews on the impact of economic events with comments featured in top international and Russian media. Alex covers fundamental analysis, global markets, the foreign exchange market, gold, oil, and cryptocurrencies in his analytical pieces. As the senior financial analyst at FxPro, Alex is a guest expert in 1-tier global media such as Forbes, Coindesk, Euromoney and Morning Star.