One of the theories that pushes the cryptocurrency market up is a misunderstanding of the economy and monetary policy pursued by central banks worldwide. Conspiracy theories could also be added here, but the governor of the central bank of Finland did not go that far in his interview. In his opinion, the central bank's money in digital form can be trusted unconditionally. "Some joked that the central bank's digital currency (CBDC) is the solution to the problem. Although I may not be an ardent fan of CBDC, I think that detractors unfairly downplay the potential advantages of this tool," said Olli Rehn during a speech at the University of California at Berkeley.
Since last year, when the special activity began, central banks worldwide have begun to explore the benefits of CBDC. Some of them, for example, China and Nigeria, have already introduced digital currencies inside their countries. The European Central Bank is still in the middle of an experiment with the digital euro, which is due to end in October 2023. However, the bank's public announcement about the digital euro has been repeatedly criticized for the perceived dangers and risks.
During the interview, Rehn also warned against the potential risks of moving to a more digital economy, as evidenced by the growth of cryptocurrency markets over the past five years. According to Rehn, the high volatility of crypto assets will be quite difficult to link with monetary policy and the general movement of prices. "Central banks should prepare for a digital future in which the demand for cash as a medium of exchange may decrease, requiring convertibility into digital money by the central bank. We must remember that our main task is maintaining price and financial stability," Ren said.
If we return to the real market and set aside the future, the further direction of bitcoin will depend directly on what the Fed representatives say at the end of this week. Several politicians have already made disappointing statements that they support a further hard course of raising interest rates, which goes against market expectations and affects the demand for risky assets, which includes bitcoin. Bitcoin buyers tried returning to the $21,500 level earlier this week, but it didn't work out well. Most likely, the pressure on the trading instrument will continue to increase as investors abandon risk. The bulls' focus is now on the nearest support of $20,800, a fall to which for the third time could be fatal for the bulls. In the event of a breakthrough in this area, the $19,966 level will play an equally significant role. Its breakdown will send the trading instrument back to the lows of $19,232 and $18,600. It is necessary to consolidate above $21,500 as quickly as possible to restore the demand for bitcoin. It is necessary to break above the resistance of $22,180 and $22,670 to build an upward trend. Fixing this range will give a real prospect of returning to the highs: $23,180 and $23,680.
Ether buyers have every chance to miss the nearest support of $1,605, so it is not yet possible to talk about the resumption of a bullish scenario. There will be a change in the market direction only after the return of the $1,670 level, allowing you to get to $1,740 and reach the $1,820 test. The $1,885 area will act as a further target. While maintaining pressure on the trading instrument, buyers will likely show themselves at around $ 1,540. A breakdown at this level will quickly dump the ether at a minimum of $1,490 with the prospect of updating to $1,420.
