Bitcoin drops for second week; Ether merge mania fades again

CRYPTOCURRENCIES mirrored global markets and declined after Jerome Powell warned against prematurely loosening policy, with Bitcoin settling into the lower end of the narrow range that it has traded in the past two weeks.

“Powell’s admission that there will be pain before there is relief is rather hawkish,” said Josh Olszewicz, head of research at digital asset fund manager Valkyrie Investments.

The largest cryptocurrency by market slumped as much as 4.9% to $20,579 in New York, putting it on pace for a second consecutive weekly loss. It has traded in a range of around $22,000 to $20,000 since last Friday. Ether fell for the first time in four trading sessions, and was also lower for a second week. Solana and Avalanche fell more.

Even so, some analysts say that the recent trading patten presents a buying opportunity.

Onchain metrics “signal that the price is at the accumulation zone, which has been historically market bottom formations and value investing,” CryptoQuant said in a report Thursday.

Powell, the Federal Reserve chairman, signaled the US central bank is likely to keep raising interest rates and leave them elevated for a while to stamp out inflation, and he pushed back against any idea that the Fed would soon reverse course. Low rates are seen as one of the catalysts for pushing investor into crypto during the Covid lockdowns.

Ether had been outperforming the broader crypto market in recent weeks amid optimism over a pending network software upgraded called the Merge. –BLOOMBERG