[Bitcoin Now] Powell's 'Big Step' Remark Sends Price Plunging to $39,000 Range

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The price of the leading cryptocurrency Bitcoin is showing a downward trend. Analysts attribute this to the hawkish remarks made by Jerome Powell, Chairman of the U.S. Federal Reserve (Fed).

According to the global cryptocurrency market tracking site CoinMarketCap, as of 2:05 PM on the 23rd, the price of Bitcoin was $39,541 (approximately 49.17 million KRW), down 2.97% from the previous day. This marks the first time in four days since the 19th of this month that Bitcoin’s price has fallen into the $39,000 range.

Bitcoin’s price declined following Powell’s confirmation of a so-called 'big step' of a 0.5 percentage point increase in the benchmark interest rate in May. The widening concerns over tightening monetary policy have dampened investor sentiment toward Bitcoin. On the 21st (local time), Powell attended a panel discussion hosted by the International Monetary Fund (IMF) in Washington D.C. and stated, "I think it is appropriate to raise the benchmark interest rate a bit more quickly," adding, "A 0.5 percentage point increase will be discussed at the May meeting." He also said, "The economy does not function properly without price stability."

The Nasdaq Composite Index, which is tech-stock heavy and tends to move in tandem with Bitcoin prices, also recorded a decline. On the 22nd, the Nasdaq closed down 335.36 points (2.55%) at 12,839.29. Additionally, the Dow Jones Industrial Average fell 981.36 points (2.82%) to 33,811.40, and the large-cap focused S&P 500 Index closed 121.88 points (2.77%) lower at 4,271.78.

Cryptocurrency specialized media CoinDesk reported, "The uneven trading environment shows that uncertainty remains among investors amid macroeconomic and geopolitical risks," adding, "Investors are preparing for short-term volatility or downside risks related to major events or announcements."

Meanwhile, the Digital Asset Fear & Greed Index by Dunamu, the operator of the domestic cryptocurrency exchange Upbit, recorded a 'neutral' level of 46.16 on the day. This is a decrease of 0.22 from 46.38 (neutral) the previous day and a drop of 2.05 from 48.21 (neutral) on the 16th of this month. Dunamu’s Digital Asset Fear & Greed Index is divided into stages: 'Extreme Fear (0?20)', 'Fear (20?40)', 'Neutral (40?60)', 'Greed (60?80)', and 'Extreme Greed (80?100)'. A greed direction indicates increased interest in buying among market participants, whereas a fear direction signals a fear of asset decline leading to market exits and a chain reaction of price drops.