Crypto Market Volatile as Powell Warns of Tariff Inflation

Federal Reserve Chairman Jerome Powell's recent remarks on tariff policies and their potential impact on inflation have sparked significant reactions in the financial markets, particularly in the crypto space. During a press conference following the March FOMC meeting, Powell suggested that the new tariff policy could drive inflation higher. He acknowledged the economic uncertainty stemming from potential "significant policy changes" by the Trump administration, though he did not attribute the inflation solely to tariffs. Powell noted that prices have already risen to some extent, indicating inflationary pressures.

Powell emphasized that it might be premature to definitively comment on the inflationary effects of the tariffs. This suggests that the Federal Reserve is already analyzing economic data and assessing the long-term implications of these policy shifts. The ambiguity in Powell's statements has caused considerable unease in the financial communities, especially among crypto investors and traders. The crypto market, known for its volatility, reacted swiftly to Powell's comments, with major cryptocurrencies like Bitcoin and Ethereum experiencing price swings.

Powell clarified that the Federal Reserve does not intend to adjust interest rates based on tariff-related factors in the near future. Lower interest rates generally benefit riskier assets, including cryptocurrencies. However, Powell's cautious approach has left traders in a state of uncertainty, contributing to further market volatility. The crypto market is caught between its inherent volatility and its sensitivity to traditional financial systems, making it difficult to predict future movements.

As the Federal Reserve navigates an uncertain economic landscape, the crypto market is bracing for potential further disruptions. The crypto community is eagerly awaiting additional updates, as these could provide insights into how inflation will evolve in the coming months. Bitcoin, in particular, has shown resilience despite the market turbulence. On March 20, Bitcoin experienced a 3% price increase, starting the day at $82,776 and briefly reaching $83,149 by 1:00 UTC. However, a correctional period followed, pulling Bitcoin back to $82,600. The support trendline continued to climb until 16:00 UTC, when Bitcoin reached $84,800. The Relative Strength Index (RSI) entered the overbought region, leading to a price decline back to $84,000 by 18:10 UTC.

At 18:15 UTC, a golden cross indicated a price improvement, resulting in a significant upward spike that took Bitcoin to a resistance level at $85,850. Despite this resistance, Bitcoin's bullish momentum pushed it further to $87,447. The overbought RSI triggered a price decline, and by the end of March 20, Bitcoin stabilized around the $85,700 mark. Analysts predict that if the buying pressure continues, Bitcoin could surpass $87,000. However, in the short term, a trading range may be expected before any significant price movements occur. If Bitcoin fails to maintain its bullish momentum, it could drop to the $85,000 range.