Bitcoin Takes Big A Hit For The Second Time In 10 Days

Bitcoin (BTC) took a hit in the last 24 hours after the U.S. Federal Reserve Chair, Jerome Powell, revealed that they’re going to sustain a strict monetary policy on digital money. At the time of writing, Bitcoin fell from a 48-hour high of $51,450 to $46,220. Currently, it sits evenly at the $47,000 mark.

For BTC traders who claim that the cryptocurrency’s price offers good cover against potential collapse of fiat cash, the comments posted by the U.S Federal Reserve suggest little room for ease of doing business in the crypto streets.

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Why is the crypto space showing irregular shifts this week?

It’s probably because people are expecting the economy to improve as the global vaccine rollout picks up the pace and COVID-19 restrictions are gradually being lifted.

Because of this, the cost of borrowing money is going up in some of the world’s leading commercial banks as the global demand for credit increases. The U.S Federal Reserve has taken notice and introduced a mammoth $120 billion-a-month bond purchasing program to give more power to the country’s Central Bank, a dirty move in the eyes of crypto investors.

Typically when something like this happens, investors become more confident with the economy because they’re looking for investments that yield higher returns. Yields increase as demand decreases.

The Federal Reserve doesn’t have any intention of lifting restrictions on the crypto space, and slight inflation helps the economy grow.

However, the same logic might not apply to crypto traders, who have looked towards Bitcoin as a buffer against inflation.

Hoping the newer red line is just a secondary trend on the way up following the primary yellow trendline. 42k is the alamo and needs to hold. The next week will be interesting. #bitcoin $btc #cryptocurrency #cryptocurrencies pic.twitter.com/lPa1vMX5X1

— cryptoplata (@0xCryptoplata) March 5, 2021

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Bitcoin is now as much as $10,000 below February’s rally above $58,000, fueling speculation as to whether the investment base will widen or take bigger hits similar to the 2017 boom and bust.

Overall risk appetite in markets feels nauseous after “Federal Reserve Chair Jerome Powell refrained from pushing back” against the climb in long-term borrowing costs, which is why the overall crypto space is feeling a little over the weather.