The market’s optimism that the rate hike will be paused is what encouraged Bitcoin, which fell below $25,000 last week.
After two weeks without movement, Bitcoin returns to generate some expectation in investors registering its highest rise in almost six weeks. However, then the rise moderated until it settled at US$26,200 in the last 24 hours. This happens while waiting for Jerome Powell, the Chairman of the Federal Reserve, participate in Jackson Hole.
Like every year, the Federal Reserve This August, Kansas City hosts the largest forum for central bankers on the planet, the Jackson Hole Economic Symposium.
The monetary politics is in a very delicate moment, and as usual, the Fed will want to take advantage of the meeting to launch messages to the market that help anticipate what course it will follow in the coming months. Right now there are two unknowns that investors will want to answer: first, if there are still any rate hike on the horizon, and secondly, when will the first cut of this cycle arrive?
The market’s optimism that the rate hike will be paused is what encouraged Bitcoin, which fell below $25,000 last week.
This Friday, Powell will deliver his speech in jackson hole and the cryptocurrency market will listen carefully to see if interest rates in the US will stay high for a long time or if, on the contrary, the cuts will come as early as 2024.
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Jackson Hole: why it can bring good news for cryptocurrencies
The history shows that, during the last four years, the cryptocurrency price and above all of bitcoins have reacted negatively to this event. Analysts estimate that what it will do for sure is return volatility to this market.
And they also bet that the bitcoin price could plummet if Powell delivers a dovish message and reinforces expectations for further rate hikes. On the contrary, the demand for these risk assets it will be triggered if the Fed Chairman decides to opt out of further hikes.
“We will probably see some sharp movements up and down as bitcoin tries to return to $30,000,” they say from eToro. They see bitcoin’s price resistance as due to “the hope of lower rates.” This, added to a few hours of stable trading, “might have been enough to lure buyers back.”
Source: Ambito
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