Powell Foresees Pain, Bitcoin and Ethereum Fall

The Jackson Hole address by Fed Chair Jerome Powell was immediately followed by a sharp decline in Bitcoin (BTC) and Ethereum (ETH). BTC and ETH prices dropped 1.83% and 1.80% in the hour following the commencement of the Fed Chair's address, respectively. The macroeconomic conditions are not favourable for the bitcoin business at the time of this sudden decline. The crypto market briefly rallied after the inflation statistics announcement earlier this month. For cryptocurrency traders who struggled this year owing to severe volatility, this came as a relief.

Powell Speech Causes a Quick Drop in the Price of Bitcoin

The focus, Powell said at the outset of his speech, is on getting inflation back to the target of 2 percent. The Fed Chair emphasised the necessity of price stability for the economy as well as the Fed's role in it. He predicted that lower inflation will be achieved by higher interest rates, slower growth, and looser labour market conditions.

A sluggish American economy

The U.S. economy is definitely slipping from the historically high growth rates of 2021, according to the Chair of the Federal Reserve. According to him, the expansion in 2021 was due to the economy's recovery from the pandemic slump. Despite conflicting economic indicators, Powell claimed that the nation's economy still exhibits a solid underlying momentum. The demand for workers is definitely outpacing the amount of people that are available, despite the labour market being very strong.

In the meantime, the price movements of other cryptocurrencies are being affected by the decline in Bitcoin and Ethereum prices following Powell's speech. As of this writing, the price of Bitcoin is $21,260, a decrease of 1.95% over the previous day. On the other hand, Ethereum is currently trading at $1,640, down 4.2% over the past day.