Bitcoin price is starting to look choppy and the US Fed may make it worse
Bitcoin's monthly losses currently stand at 7%.
- Federal Reserve chairman Jerome Powell recently noted that the ongoing issue of inflation could be more severe than previously imagined.
- As a result of Powell's comments, the crypto sector along with the stock and commodities market proceeded to plunge massively yesterday.
- A key technical indicator suggests that BTC may dip as low as AUD$61k (US$44k) before proceeding to hit a new all-time high.
After unexpectedly making a major push to the AUD$82,500 mark a little over 12 hours ago, Bitcoin, the world's largest cryptocurrency by total market capitalisation, has shown visible signs of correction, scaling to a local bottom of AUD$78,400 only to rise a bit once again. At press time, BTC is trading for AUD$79,722.
This latest round of volatility seems to have been spurred by Federal Reserve chairman Jerome Powell acknowledging that the looming issue of inflation may be more than just a "transitionary" problem, going as far as saying that major consequences of the recent money printing could become more visible in the near future. As a result of these comments, BTC, stocks and commodities proceeded to plummet rapidly.
To elaborate, CryptoQuant analyst Jan Wuestenfeld noted that over the last 24 hours the US dollar index (DXY) has shown signs of a mild increment while the DOW, gold and other equities indexes pulled back visibly, adding: "US dollar index appreciating on Powell remarks that the Fed might speed up taper (no matter how believable). Everything else going down. Gold included."
Bitcoin mining firm makes its way to the NYSE
As per a new filing made with the US SEC earlier this week, Adit EdTech Acquisition Corp — a special purpose acquisition company (SPAC) – revealed it would merge with Cincinnati-based Bitcoin mining company GRIID for a base valuation confirmed to be around US$3.3 billion.
As a quick refresher, SPACs are "blank cheque companies" that are meant solely to help facilitate the acquisition of third-party entities in a seamless manner. Once the deal concludes, GRIID will make its way onto the New York Stock Exchange (NYSE) under the ticker symbol GRDI.
In a recent presentation, GRIID revealed that it hopes to mine over 637 BTC by the end of 2021 with a total hash rate of 187 petahash per second (PH/s).
Is BTC's future valuation still uncertain?
Despite Bitcoin hitting a relative high of US$59k recently, independent analyst TechDev noted that Bitcoin's Stochastic relative strength index (Stoch RSI) continues to reveal that the flagship crypto may reset to a relative low of US$44k before commencing on a fresh bull run, which may help take Bitcoin to a fresh all-time high.
Also, a few days ago Jack Dorsey revealed that he was stepping down from his role of Twitter CEO to focus on BTC-centric activities. It will be interesting to see how the market responds to this news over the coming few days.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.