Bitcoin and Ethereum instantly slumped by almost 10%. Thus, the long-awaited growth in the crypto market is out of the question in the near term. Perhaps, the US nonfarm payrolls could encourage crypto investors and prop up cryptocurrencies. Alas, there is a slim chance.
Before we sort out the technical picture for the crypto market and try to figure out when the bear trend could eventually halt, let's look at the recent testimony of Fed Chairman Jerome Powell who also made remarks on the CBDC progress.
Yesterday, Jerome Powell testified in front of the House Financial Services Committee. During the hearing, Congressman Steven Leach asked the Fed Chair to make an update on launching the central bank digital currency (CBDC) nicknamed by common people as the digital dollar. For your reference, Steven Leach is a high-ranking member of the digital assets and financial technologies committee.
Commenting on the Federal Reserve's progress on CBDC, Jerome Powell said that the central bank is constantly interacting with the public. The regulator is also conducting research in this area in order to obtain as much information as possible in this regard. The development and implementation of new technology plays a big role for the economy. The Fed's leader also noted that he would expect the central bank to adopt the project in the short term but he evaded saying the exact date when the digital dollar would be launched.
"We're not at the stage of making any real decisions," he said. "What we're doing is experimenting in kind of early stage experimentation. How would this work? Does it work? What's the best technology? What's the most efficient?" Jerome Powell answered the question on the structure and the architecture of CBDC. He also pointed out that the Federal Reserve is forging ahead to ensure progress in the solution of technological issues. Apart from innovations, he expanded on burning questions of monetary policy.
Interestingly, a few bills on the limited CBDC use have been recently submitted to the US Congress. Last month, American attorney and lawmaker Tom Emmer presented the bill on the CBDC supervision that bans the Federal Reserve from employing CBDC in monetary policy implementation.
As for the intraday technical picture, Bitcoin is carrying on with its free-fall. The bulls will be able to take the lead only after they take control over $20,700. Once this level is taken out, BTC will gain a chance for a correction with the prospects of updating $21,700. The highest upward target is seen at $22,500 where traders might fix large profits. Afterwards, Bitcoin will retrace downward. In case selling pressure on the token escalates, the bears will have to defend $19,600. Its breakout will deal a blow to the instrument because the door will be open down to $18,300. In turn, a breakout of that level downward will push the number one crypto to about $17,400.
Ethereum buyers are now focused on the task of regaining the nearest resistance of $1,390. Only this will help subdue the bearish pressure. As a result, the price could rebound to $1,470. After this level is topped out, the token will be able to climb to $1,540. Thus, Ethereum will regain bullish momentum with the prospects of growth to $1,595. Alternatively, if the instrument remains under selling pressure and declines lower, the level of $1,320 will come into play. The next key level is seen at $1,260. Once broken, the token will drop as low as $1,190.