Fed chair Jerome Powell’s speech was anything but good news for the crypto markets. Bitcoin and the rest of the crypto market were showing strong rallies because of favorable inflation data. Bitcoin went up by 4% while Ethereum went up by more than 5%. 

However, Powell took an aggressive stance in his Jackson Hole speech. As a result, Bitcoin has fallen close to 6% in the last 24 hours. It is currently trading at $20.2K. Meanwhile, Ethereum has slipped close to 10% to trade at $1,503. It is highly likely to drop below $1.5K.

Two Opposite Forces At Play

The market reacted to two very different forces at play. On the one hand, the PCE data was revealed to be lesser than expected. This is the second straight data, after the CPI data of August, that showed cooling inflation. The markets reacted favorably to both of those data reveals. 

The expectation was that the Federal Reserve would pivot from its policy of Quantitative Tightening and interest rate hikes. 

However, key Fed officials, even dovish ones like Minneapolis Fed president Neel Kashkari, took an aggressive stance. Jerome Powell took an unmistakably tough stance as well. He revealed that fighting inflation is the main objective of the Fed. He warned households and businesses of impending pain. 

The market reacted sharply and fell significantly. The S&P 500 also fell by more than 3%. Experts believe Powell’s words are a tool to curb consumer and business enthusiasm. If so, they were a marked success.

Can Bitcoin Rebound

Crypto influence Lark Davis revealed that Powell’s 10-minute speech erased about a trillion dollars from stocks and crypto. However, Michael van de Poppe, the CEO of Eight Global, has offered some hope. 

According to him, the Fed cannot continue with its hawkish policy. If so, Bitcoin and Ethereum can bounce back as future inflation data reveal cooling inflation.

Cryptocurrency enthusiasts who piled into meme coins such as Dogecoin and Shiba Inu amid the long-time industry rallying call of “to the moon” are finding this year’s journey back to earth pretty painful.

Dogecoin, Shiba Inu and other tokens associated more with online jokes rather than actual software products have been hit harder than sector originals Bitcoin or Ethereum during the recent retreat from the record price levels reached late last year. Doge is off nearly 80% from its all-time high of 74 cents in May, and Shiba has declined more than 65% since hitting its peak of fractions of a penny in late October, according to data compiled by Messari.

Trading volumes have fallen off, now measured in millions instead of billions. And the jokes that once swayed a legion of mostly retail day traders to buy up coins on a whim come with a hint of sadness.

The frenzy started with Doge. A digital token created in 2013 by a pair of software engineers took off as interest in crypto trading spiked and a new crop of retail traders took to social media platforms, using jokes, sarcasm and trolling to gin up their popularity. Tesla Inc. Chief Executive Elon Musk’s embrace of the token helped to send it soaring. Doge’s popularity inspired the creation of new tokens based on the breed of dog, including Shiba Inu, Baby Shiba Inu and Floki, which is named after Musk’s pet.

Amid the ongoing crunch in crypto prices, the memes have become less breezy. One Twitter user under the handle Shibetoshi Nakamoto tweeted a cartoon of a young man in a backwards cap asking at the pearly gates: Did I waste my life by making Dogecoin?

DogeTooCheap tweeted a picture of a grim reaper with the face of a Shiba Inu knocking at doors labeled 17 cents — a level at which the coin has struggled to break above since late December.

This our life right now $Doge #Dogecoin

Stalwarts say Shib coin holders are “on the way to the moon and beyond,” but dedicated chatrooms show that the oft-repeated rally cry appears to have lost some of its power.

January will be the month to determine the growth of #SHIB. I have a very good feeling we’re on the way to the moon and beyond.

On a Shib-dedicated Discord channel a user going by djcau5e wrote: “It’s a complete roll of the dice, while I would love to go to the moon I think a lot of peoples expectation to hit $1 or even .01 is unrealistic in the next few years.” At Shib’s peak, it was $0.0000875.