What did the Fed Chairman just say that caused the financial markets to fall, gold and Bitcoin to plummet?

Financial markets suffered a sharp decline on Thursday amid concerns about inflation and rising interest rates. Investors opted to take a step back as recent economic indicators pointed to rising inflation risks, which weighed on stocks, gold and Bitcoin.

Financial markets fall after Fed Chairman’s remarks

Major financial indices such as the S&P 500, Dow Jones and Nasdaq all fell after Federal Reserve Chairman Jerome Powell said the Fed had no reason to rush to cut interest rates. A new report on the Producer Price Index (PPI) showed that inflation is likely to rise faster than expected, raising concerns among investors that the Fed will keep interest rates high for an extended period. Following Powell’s comments, stocks of major companies fell as investors decided to take a step back and wait and see.

Gold and Bitcoin were also not immune to the downward trend. Gold edged down 0.3% to $2,564.70 an ounce. Bitcoin, meanwhile, fell 0.54% to $88,255. Analysts at Secure Digital Markets said Bitcoin was in the $89,000-$91,000 range before falling to $88,300 after the US market opened. However, experts remain bullish on Bitcoin’s long-term prospects as investment flows through cryptocurrency exchange-traded funds surged, with investments reaching $4.7 billion this week.

Can Bitcoin reach $180,000?

According to Matthew Sigel, director of digital asset research at VanEck, Bitcoin has the potential to reach $180,000 next year, which would represent a 1,000% gain from the bottom to the top of this cycle. Sigel believes that Bitcoin’s bull run is still in its early stages and predicts that prices could reach new highs in the next two quarters.

Sigel also noted that Bitcoin’s previous strong price increases occurred after the US presidential election, when Bitcoin doubled just a few months after the 2020 election. He hopes that support from the current administration will continue to drive the crypto market forward.

The rise of Bitcoin ETFs has attracted many institutional investors, who are moving capital into the crypto market. Sigel said that he has received many calls from investment advisors, expressing their desire to increase their investment in Bitcoin from 1% to 3% of their total assets. This creates a new inflow of capital into the market, contributing to Bitcoin’s long-term bullish momentum.

According to experts from TradingView, Bitcoin is currently in the neutral zone of a two-year-long Channel Up. However, technical indicators still show significant upside potential, with a medium-term target of $94,500 and a long-term target of $140,000. Significant corrections may only occur when the RSI (relative strength index) crosses overbought levels (>70), as it has done in previous rallies.