Powell Touched On The Topic Of The Digital Dollar And The Crypto Industry

Most Fed Members Support A Hawkish Scenario

Yesterday, the next speech of the Chairman of the Federal Reserve System, Jerome Powell, took place. In his speech, he touched on the topic of cryptocurrencies and, in particular, decentralized finance (DeFi). Coincidence or not, bitcoin and ether reacted with a sharp decline to the statements, which led to the return of trading instruments to quite dangerous levels. But before we discuss the technical picture, let's deal with the statements.

At a panel discussion on digital finance organized by the Bank of France, Federal Reserve Chairman Jerome Powell spoke about the planned regulation of decentralized finance. "The normalization of monetary policy worldwide is very important for the future. We must deal with structural problems in the Defi ecosystem and conflicts of interest." First, one of the most important problems that Powell drew attention to is the structure of transparency.

Exchange Rates 28.09.2022 analysis

"The good news is that, from the point of view of financial stability, the interaction between the Defi ecosystem, the traditional banking system, and the traditional financial system is not so great at the moment. The recent sharp collapse of DeFi has not significantly impacted the banking system and financial stability in general," Powell said. According to the official, it is necessary to do a lot of work with regulations, but it should be done carefully and thoughtfully.

The Chairman of the Federal Reserve System warned that the uncontrolled situation in the crypto industry would not continue indefinitely. There is now a real need for more substantive regulation so that as Defi expands again and begins to cover more and more retail customers, there will be appropriate regulation.

It is worth noting that Christine Lagarde, President of the European Central Bank, and Agustin Carstens, Director General of the Bank for International Settlements, also participated in the discussion.

The head of the Fed also noted the risk of using stablecoins in a broader sense and the need to develop legislation in this direction. Powell also touched on the topic of the digital dollar, saying that it will take several more years of research before the Fed decides to issue it or not.

As for today's technical picture of bitcoin, as I noted above, the failure of the trading instrument and the return to the framework of the side channel took place quite quickly. This indicates that investors have no interest in risks. The focus is now on the $19,000 resistance, the return of which is necessary to build a new upward correction in the pair. In the case of a breakthrough in this area, you can see a dash up to $19,520 and into the $20,000 area. To build a larger upward trend, you need to break above the resistances: $20,540 and $21,410. If the pressure on bitcoin increases, and all the prerequisites for this, the bulls should make every effort to protect the support of $18,625, just above which trading is now underway. Its breakdown will quickly push the trading instrument back to the lower border of the $18,100 side channel and pave the way for an update of the $17,580 level.

Ether has again failed to reach the significant support of $ 1,275, and now there is a risk of building a new bear market. A breakdown of $1,275 can lead to significant changes in the market. Only a fix above $1,343 will somehow calm the situation and return the balance to the ether. Consolidation above $1,343 will stabilize the market direction and push the ether to another correction in the area of $1,402 and $1,457. The further targets will be the areas: $1,504 and $1,550. If the pressure on the trading instrument remains and at the breakdown of $1,275, we can see a new movement of the trading instrument down to the support of $1,210. Its breakdown will push the ether to $ 1,150, where major players will manifest themselves in the market again.

 

Relevance up to 10:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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Most Fed Members Support A Hawkish Scenario

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