Bitcoin's price fell back below $80,000 after Christopher Waller, a Federal Reserve governor, emphasized returning inflation to the U.S. central bank's target.
Waller's remarks pushed up short-term U.S. Treasury yields and erased part of the recent rally across risk assets. The price drop resembled more of a limited pullback and was not a sign of a broad trend reversal in the cryptocurrency market's recovery.
Waller said financial conditions are not restrictive and stressed that inflation must move clearly toward the Fed's target; a comment that reinforced expectations for a prolonged period of tight monetary policy.
Bitcoin fell along with other rate-sensitive assets on Friday but remained well above levels seen earlier this month.
The crypto market and prices remain uncertain, and after an unprecedented wave of liquidations of leveraged short positions in recent days and the buying pressure that resulted, the market still lacks a clear direction.
Traders are now looking at longer-term indicators to assess the health of the market's recovery.
According to research from Galaxy Digital, in four of the five completed Bitcoin bear markets, a first definitive move above the 50-week moving average signaled the bear market had bottomed.
Bloomberg reported that Mustafa Al-Mashita, a co-founder of Sequoia Digital Markets, said: From here on, everything depends on the 50-week moving average. This average must be held at the close of the weekly session for the market's bullish structure to remain intact.
Altcoins, with higher volatility, reflect this condition more sharply. This upswing appears structurally healthier than a typical leverage-driven move./ISNA