Bitcoin, stocks and commodities correct after Fed chair mentions policy change

The Federal Reserve is considering a policy change that would end its monetary policies and allow the price of Bitcoin to fluctuate on its own.

The “invest in bitcoin now” is a cryptocurrency that has been on the rise. The price of Bitcoin and other cryptocurrencies have gone up since Janet Yellen mentioned that the Federal Reserve may be considering changing its policy.

On Nov. 30, the global financial markets were jolted by statements by US Federal Reserve Chair Jerome Powell, who suggested that inflation and the Omicron Covid-19 variant are mounting risks, and that the bank’s easy money policies may expire sooner than expected.

Bitcoin (BTC) had been on the upswing before to Powell’s speech, rallying 6% from a low of $55,840 in early trading hours on Nov. 30 to an intraday high of $59,200, but the price was slammed down below $57,000 following the Fed’s words.

Bitcoin-stocks-and-commodities-correct-after-Fed-chair-mentions-policy4-hour chart of BTC/USDT. TradingView is the source of this information.

Bitcoin has recovered to $58,000 at the time of writing, but a series of technical indications indicate that traders are wary about BTC’s future move.

Commodities and stocks have taken a knock.

The Fed’s remarks wreaked havoc on more than just Bitcoin. The dollar index (DXY) climbed, while the DOW, gold, and other equity indices declined, according to economist and CryptoQuant analyst Jan Wuestenfeld. 

Bitcoin-stocks-and-commodities-correct-after-Fed-chair-mentions-policyDXY vs. Gold vs. BTC/USD vs. SPX vs. DXY vs. Gold vs. BTC/USD vs. SPX Twitter is the source of this information.

According to Wuestenfeld,

“The US dollar index is rising as a result of Powell’s comments that the Federal Reserve may accelerate the tapering process” (no matter how believable). Everything else is falling apart. “Gold is part of the package.”

Cryptocurrencies, according to Vladimir Putin, “carry tremendous dangers.”

The Fed “acts in a binary manner.”

Market analyst and former Treasury employee Nik Bhatia gave further insight into the Fed’s behavior, stating that the Fed “doesn’t have the flexibility to adapt to dynamic situations” and instead “behaves in a binary fashion.”

According to Bhatia,

“If things are going well, policy may be tightened.” When the economy is in turmoil, policy is relaxed.”

“Inflation is strong in the United States,” according to Bhatia, with “headline indicators pointing to multi-decade high rises in aggregate pricing levels.”

Meanwhile, the Fed has enacted “basically the simplest monetary policy ever,” prompting Bhatia to warn that “with inflation waking up, this will soon come to an end.”

According to Bhatia,

“The Fed is plainly on the verge of committing a policy mistake, in which it tightens policy despite lower longer-term growth and inflation expectations as a result of tighter monetary policy (thus the phrase policy error).”

It’s no longer referred to as “transitory inflation.”

Surprisingly, Powell’s remarks recognized that the year-long theme of “transitory inflation” is coming to an end, with the Federal Reserve chair indicating that the transitory narrative should be “retired.”

Chairman of the Federal Reserve, Jerome Powell, has advised that we cease using the term “transitory” when discussing inflation.

“I believe it is time to retire that term and attempt to clarify what we mean more clearly.”

It was never a passing fad, as everyone knew.

30 November 2021 — Pomp (@APompliano)

While it’s encouraging to see the Fed be more forthright, cryptocurrency analyst Anthony Pompliano pointed out that the typical citizen understood all along that the inflation was far from “transitory” and would likely persist far beyond 2022.

The total value of all cryptocurrencies is currently $2.638 trillion, with Bitcoin commanding 41.2 percent of the market.

The author’s thoughts and opinions are completely his or her own and do not necessarily represent those of Every investing and trading choice has risk, so do your homework before making a decision.

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