Bitcoin falls on Fed's promises of higher interest rates

Cryptocurrencies wavered on Tuesday and Wednesday due to recent statements by several members of the US Federal Reserve (Fed), that reinforced the conviction of the markets that the plans for rate hikes are relentless for the world's most powerful central bank. Bitcoin, which was picking up steam to try again with the $48,000 resistance, ended up closing with drops of 3%, down to $45,500, a price it is eroding right now, according to data from 'CoinMarketCap'.

As for the rest of the 'altcoins', the setbacks are up to 5% for Cardano, Avalanche or Solana, while Ethereum gives up more than 4% to $3,350. Total capitalization also falls below $2.1 trillion.

Dogecoin continues its advance and rises an additional 6% in 24 hours, to accumulate gains of 14% in the last seven days. However, it is correcting the rally on Wednesday after touching two-and-a-half-month highs on Tuesday, above $0.17. Fans of the currency inspired by the meme of a Shiba Inu dog continue to celebrate Tesla founder Elon Musk's 9% purchase of Twitter and have launched speculation about further links between the cryptocurrency, of which Musk is a staunch supporter, and the microblogging social network.

The CEO of Tesla and Spacex, has joined Twitter's board of directors and has promised to "make significant improvements" to the social media platform. Some of the changes he's shuffling around include adding an edit button and fixing the proliferation of cryptocurrency spam bots, as he considers this Twitter's "most annoying problem."

This news, that has the entire cryptocurrency community in an uproar, shares the limelight with statements by Fed Governor Lael Brainard, normally a proponent of loose policy and low rates, who in a speech for a Minneapolis Fed debate advanced an early balance sheet reduction "at a rapid pace": "Currently, inflation is too high and subject to upside risks. The Committee stands ready to take stronger action if inflation indicators and inflation expectations indicate that such action is warranted."

Meanwhile, San Francisco Fed President, Mary Daly, commented at an event hosted by the Native American Finance Officers Association that "inflation is just as damaging as not having a job. Having a job and not being able to pay your bills, or feeling like you can't save for what you need to do? That keeps you up at night and our goal is to make sure that people don't lie awake worrying about whether their dollar today will be the same and worth a dollar tomorrow."

BITCOIN MAINTAINS ITS TECHNICAL PATTERN

These statements have triggered a drop in risk markets. All in all, "Bitcoin maintains an impeccable double support in the new support zone (formerly resistance) conferred by the top of the symmetrical triangle," pointed out José María Rodríguez, technical analyst at Bolsamanía. "This theoretically leaves the underlying in a position to continue to rise, to restructure again to the upside with a target above $60,000, the width of the triangle in question," he added.

The expert does not rule out at all a move towards the all-time highs at $69,400. Short-term support is provided by last Friday's lows at $44,345.