Powell said in one sentence, is Bitcoin going to take a break? Don't worry, understand the direction of the US dollar!
I am Qi He. Today's major event in the foreign exchange circle is directly related to the rise and fall of our cryptocurrency wallets! The head of the Federal Reserve, Powell, just set the tone: no rush to 'loosen'!
The 'big brother' dollar won't be plummeting desperately for now, it has support. Although the dollar did drop a bit that day, as long as the subsequent economic data from the US doesn't crash to an unacceptable level, the dollar's status will remain stable.
What impact does this have on our crypto market? The correlation is significant! A lot of hot money flows in the market often move against the trend of the dollar. If the dollar stops dropping, or even strengthens, that portion of funds originally intended for high returns in the crypto space may flow back or not come at all, creating short-term pressure on the market, which may put pressure on the prices of Bitcoin, Ethereum, and other major cryptocurrencies, increasing volatility.
What should players do now? My personal opinion is:
In the short term, don't mess around. For the next few days, keep your pockets tight, watch more and act less, especially don't chase high prices easily. Focus on observing the upcoming US employment and inflation economic data. If the data is impressive, the dollar is strong, and the crypto market may continue to experience 'anemia' fluctuations; if the data is terrible, and the dollar itself is on a rollercoaster, then the crypto space will likely bounce around as well, with opportunities and risks coexisting.
In the long term, don't scare yourself. The fundamentals of the crypto market ultimately depend on the development of blockchain technology and the implementation of regulations; the dollar factor is more about short-term emotions and capital influences. Don't panic and sell everything at the slightest disturbance.
In summary: Powell has given the dollar insurance, and the short-term capital situation in the crypto space may be affected, requiring more patience to observe. But long-term players have no need to panic; invest regularly, study, and don't be washed out by short-term volatility. Remember, the greater the storm, the more you need to hold on to the steering wheel of truly valuable assets!
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