Bitcoin has remained relatively range-bound since the start of the month, moving between $31,500 and $34,000. The price of Bitcoin is nearing the lower band of its current trading range which suggests it’s near a critical inflection point. If the lower level of the band is tested, the price would go down to the $30,000 major support level. If it were to stop dropping and rally back, it could retest the upper trading band, which currently sits near $34,000. After falling for 3 days, BTC is still holding above $32,000. The Bitcoin market is trying to bounce now, but the bulls need a stronger rally as we continue to see sustained bearish pressure in this market.
Federal Reserve Chair Jerome Powell said the necessity for the U.S. central bank to launch a digital currency is that it could cut the need for private alternatives such as cryptocurrencies and stablecoins. When asked if issuing a CBDC would be a more viable alternative than allowing multiple cryptocurrencies or stablecoins to emerge in the payments system, Powell said he agreed.
It’s worth noting the Fed warned about cryptocurrency volatility for the first time in its semi-annual Monetary Policy Report published last week. Powell was asked specifically about Tether, currently the largest stablecoin. Powell said most of the time those assets are very liquid. But during the recent financial crisis they also tended to underperform which should be strictly regulated, therefore.