Today’s crypto market is slowing down after Jerome Powell, Chairman of the Federal Reserve, stated that interest rates need to be raised faster to combat inflation. Powel stated that they are considering a 0.5% rate increase for the next month.

After James Bullard (president of the St. Louis Federal Reserve Bank) stated that he expects that the interest rate will rise to as high at 3.5% by year’s end, this development is significant.

After the developments, Bitcoin (BTC), which was trading at $42,000 above the price of $42,000, had fallen to $40,515.77. The rest of the crypto market traded sideways, after having retraced to a market capital of approximately $1.88 trillion.

Bitcoin is a matter of making or breaking it

Market observers see the $40,000 mark as a crucial level for Bitcoin. It is where the market will decide whether it will continue to be bullish or bearish.

However, most investors believe that this is the right time to invest in Bitcoin. This is because the current spike in inflation has led to stocks collapsing, and investors have no idea how fast the central banking intends on raising interest rates.

Bitcoin, however, has been at the receiving end of the 20% decline since the start of the year. It plunged to $33,000 at the end of January, registering a drop in value of more than $35,000 compared to its record of $69,000 set on November 2013.

Inflation can be controlled by rate increases

Inflation reached 8.5% last month, and the central bank plans to increase interest rates to combat rising inflation. The discounted cash flow concept aims to appraise high-growth investments, such as technology.

Investors have faced many challenges in recent years, including rising inflation and geopolitical tensions.

According to minutes from the Fed’s March meeting, the Fed intends to reduce its balance sheet monthly by $95 billion.