Bitcoin experiences great volatility due to Powell's Speech & Chinese FUD.

Bitcoin price has once more witnessed a strong volatility in the past week. While everyone was looking up to a recovery after the initial September lows created, another sharp decline had set in last week due to the Fed Chair speech and Chinese FUD on Crypto ban. The price of Bitcoin had fallen down due to the combined effects of these two factors to a new low at $39,600. From the last high created at $47,200. Currently the market is pushing forth for a more positive recovery after these negative thrust.

Historical Chinese FUD and its effects on the market.

The market fear index has once more increased significantly to more than 85% after the recent Chinese FUD on banning Crypto currencies and it's derivatives.

On Friday 24th September, the Peoples Bank of China (PBoC) published a new set of measures to promote inter-departmental coordination on cracking down on crypto activity and it's derivatives. The measures were designed to “cut off payment channels, dispose of relevant websites and mobile applications in accordance with the law.”

This news from China was released barely one hour after the news of $3 billion BTC and $1.5 billion Ether (ETH) monthly options expiry was released. Hence the market had reacted so negatively to them that the price of Bitcoin was pushed down to $39,800 in less than 2 hours.

However the news of Chinese government banning Crypto has become an age-long FUD strategically used to crackdown the market at different points in time. It is a well known fact that the Chinese government had banned their financial institutions from participating in Crypto since 2013. Yet such report is consistently renewed and given a new headline to make it new, thereby causing undue panic in the market. However, from the previous records shown in the data above, the market had always recovered significantly after series of such Chinese FUD.

Powell Speech and it's implication on the Crypto market volatility.

The Fed Chair-Jerome Powell had announced last week Friday during the FOMC meeting that tapering was imminent and set to be implemented starting from the next Fed meeting in November. This has definitely a great implication for investments in the cryptocurrency market as investors will hardly fancy investment in Crypto currency due to the expected increase in interest rate ahead of 2022. Many investors had immediately after this speech withdrew part of their investments in Crypto; leading to the great volatility experienced in the market last week. It is therefore less likely for Bitcoin to create a new ATH above 64k this year which had been the previous ATH early this year.

Above all, unless Bitcoin shows a greater strength this new week, it is likely that the bears might profit further from investors current panic and prolong the current price fall.