Economist and trader Alex Kruger says that Federal Reserve Chair Jerome Powell’s remarks at the U.S. Senate hearing on November 30th are bearish for Bitcoin (BTC).
Kruger tells his 101,600 Twitter followers that Powell’s comments that the Fed could accelerate tapering by reducing bond purchases and that inflation is not “transitory” weakens Bitcoin’s chances of hitting a new all-time high (ATH) in December.
“Today Powell offered (without being asked) the Fed would likely decide to accelerate tapering in December. Markets tanked on that and his comments on inflation not being transitory any longer.
We don’t think today’s news suffice to change the trend for risk assets. We do think headwinds increased, and odds of BTC trading fresh ATHs in December have dropped (from ~2/3 to ~1/2).
Odds of $BTC trading above ATH by year-end implied by the options market are ~17%.”
The economist and trader says that the entire crypto market could turn bullish if unleveraged buyers push Bitcoin above $60,000.
“That said, in a market heavily hedged, if BTC manages to regain the 60ks driven by spot inflows (as opposed to leverage), would expect the whole market to pop and squeeze shorts and hedges.”
Bitcoin is trading at $57,460 at time of writing.
Citing a table provided by Jeff Dorman and using Ethereum (ETH) as an example, Kruger also says that cryptocurrencies “held up very well” after Powell’s comments despite other assets, such as stocks, plummeting.
“Crypto assets held up very well today. Crypto prices have been benefiting from fund inflows around the beginning of every month (an expression of adoption). ETH is up 7% in the day!”
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