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Bitcoin ended the week by testing the $20,000 level, but managed to rebound in Saturday’s trading, rising above $21,000. The return to $ 20,000 increases the danger of updating the annual lows that appeared after the June meeting of the US Federal Reserve.
The American financial regulator has become the architect of the crypto winter, which dates back to November last year.
Bitcoin and altcoins, along with the rest of the risky assets – stocks, thus reacted to the tightening of monetary policy. However, the fundamental conditions for the fall of stock indices that attract cryptocurrencies were laid at the end of August 2021.
At this time, Jackson Hole annually hosts a symposium of central banks, which “gave” the world many important reversals of international monetary policy. A year ago, Fed Chairman Jerome Powell’s speech was filled with the agency’s determination to raise the rate until inflation is completely curbed.
Large investors who heard Powell managed to “give the last chord”, accelerating the then growing trend of Bitcoin and stock markets, to new highs that allowed to sell assets in large volumes. The words of the head of the Fed reached the majority of trading participants in three months, already after the regulator curtailed the programs of market incentives and announced plans to raise the rate.
This year’s speech, Jerome Powell will pay special attention to all bidders. The speech of the chief financier of the United States will take place against the background of the first weakening of the growth of annual inflation.
Investors expect that the head of the Fed will hint at a slowdown in monetary pressure due to the recession-causing, twofold drop in US GDP, but objective reality indicates the likelihood of long-term keeping high rates at 4%.
Bitcoin will test the $17,000 level if it contains hawkish notes. The conference will be held on Friday, but the coming days may be very volatile.
On Monday, the People’s Bank of China publishes the main rates. A week ago, the regulator of the Celestial Empire weakened annual rates, which allowed Bitcoin to grow last weekend and Monday, August 15th. Exactly the same situation is developing right now. The weakening of China’s monetary policy stimulates the rebound of BTC.
This trend can be strengthened by a positive reassessment of US GDP, PMI data of the New and Old World, better than analysts’ forecasts. Entrepreneurs had to adapt to the crisis throughout the year, which was partially proved by the past reporting season.
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