Bitcoin Stands Strong Amidst Turbulence: Will Powell's Statement Mark a Turning Point

In the context of escalating trade tensions and concerns about the Federal Reserve's ability to lower interest rates (Fed), Bitcoin and other cryptocurrencies are showing strong resilience. Despite a 4% drop over the week, the Bitcoin has recovered from the weekend plunge, attracting the attention of investors as well as market "whales". Commercial Context and Risks from Foreign Policies Recently, concerns about global trade war have been increasing as President Donald Trump announced a 25% tariff on imported steel and aluminum. These measures were implemented after the US increased tariffs by 10% on goods from China and suspended the application of a 25% tariff on goods from Mexico and Canada for 30 days. These policies are raising concerns about the possibility of triggering a large-scale trade war, thereby negatively impacting the global economy. In this context, investors are seeking alternative investment channels to protect their asset values, and Bitcoin has emerged as a "safe haven" with surprising price growth. Monetary Policy and the Fed's Perspective While foreign exchange and trade policy factors create pressure, the Fed's monetary policy is also a key determinant of market trends. Fed Chairman Jerome Powell has recently emphasized that the central bank has no intention to hastily lower interest rates unless economic indicators demonstrate the necessity. This indicates that the Fed will continue to maintain the current interest rate at around 4.25% - 4.5% in the near future. In the context of upcoming inflation data (CPI) release, Powell will testify before the US Congress, attracting the attention of the entire market. Investors are closely monitoring every word he says, as any hint about future monetary policy can directly impact the price of Bitcoin and other risky assets. Support from market "whales" Another bright spot in the Bitcoin market is the active participation from large investors. Strategy, formerly known as MicroStrategy, continued to buy Bitcoin even when the market experienced significant price fluctuations. From February 3 to February 9, Strategy acquired 7,633 Bitcoins at an average price of approximately 97,255 USD per coin, increasing their total ownership to 478,740 BTC. The continuous buying of 'whales' even after price declines demonstrates strong confidence in the long-term growth potential of Bitcoin. They see temporary price declines as opportunities to strengthen their positions, thereby reducing the supply on exchanges. According to analysis by CryptoQuant, this week has witnessed the highest outflow of Bitcoin from exchanges since 2022, reducing the circulating supply by about 3% - a positive signal for future price increases. Conclusion: Bitcoin and Immediate Challenges Despite facing pressures from macroeconomic factors such as trade wars and tight monetary policies, Bitcoin has shown remarkable resilience. Market whales not only take advantage of price dips to accumulate, but also create a trend of withdrawing supply from exchanges, which is expected to support the long-term price of Bitcoin. In the context of Powell's upcoming congressional testimony and the upcoming CPI data release, investors are waiting for clearer signals about the direction of US monetary policy. If Powell suggests that the Fed will maintain or even strengthen current interest rates, Bitcoin may face selling pressure from investors seeking safety in less risky assets. Conversely, if there are signs of interest rate cuts in the future, money flow may pour strongly into the cryptocurrency market, continuing to boost prices. Overall, Bitcoin is maintaining strong resilience amidst economic and political uncertainties, asserting its position as a diversification asset and a store of value in times of volatility. Investors should closely monitor the developments in US monetary policy and international trade decisions, as they are the key factors determining the future of the global cryptocurrency market.