Bitcoin Drops Below $22K as Powell Suggests Further Interest Rate Hikes

The US Federal Reserve said it’s preparing to increase the interest rates even more if the situation requires such drastic measures, said the organization’s Chairman Jerome Powell.

Bitcoin reacted with an immediate price slump that drove it south by roughly $400 in minutes.

• Most financial markets had calmed for the past few days, especially crypto, in anticipation of Jerome Powell’s testimony to Congress regarding the central bank’s upcoming monetary plans.
• The Fed Chair spoke before the Senate Banking Committee on Tuesday, suggesting that the organization will likely increase the key interest rates more than previously expected. This is in contrast to what most experts believed, as the general assumption was that the Fed will not push the rates above 6%.

“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” – noted Powell.

• The Fed Chair’s comments broke the stagnation in the cryptocurrency market. As previously reported, BTC had stalled around $22,400 and didn’t make any big moves for days.
• Yet, shortly after Powell’s warning, bitcoin dumped by over $400 and slipped below $22,000 to mark a three-week low.

• It’s worth noting that there are more events and announcements coming from the US during this week that could lead to even further price fluctuations.