Bitcoin traders are taking part in a high stakes standoff ahead of Federal Reserve Chair Jerome Powell’s highly anticipated speech at the Jackson Hole Symposium on Friday.
Contradictory macroeconomic signals and mixed investors sentiment have left directional biases unknown to US stocks and crypto.
A July CPI report, released earlier this month, provided a bull signal with hopes of cutting interest rates, prompting a crypto market rally that pushed Bitcoin to an all-time high in the first two weeks of August.
However, subsequent releases of PPI data have heightened inflation concerns, further exacerbating ambiguity about whether the Fed plans to cut fees this year, including next month.
Bitcoin fell 8% from $124,128 to $114,170, from an all-time high on August 14th, after a sharp decline in the past seven days. Co Ringecko The data will be displayed.
Despite Bitcoin approaching record highs, “the market is about 85% less likely to cut fees at the FOMC meeting in September,” said John Haar, managing director of Swan Bitcoin. Decryption.
“Powell is likely to keep his comments relatively neutral in order to keep his options open,” adds Har.
Whether to cut or not, that’s Powell’s question
Bond traders continue to assert that cuts will arrive in September, but uncertainty has split into investor expectations and bets on derivative markets.
“The block bullish, bearish trading was pretty much the same,” said Adam Chu, chief researcher at options trading platform Greekslive. Big.
Even the significant trading volumes “have reduced short-term implicit volatility,” Adam said, saying “institutional investors are less optimistic that this meeting will bring about significant volatility.”
Either way, the market response is dependent on Powell’s tone.
“It’s clear that many investors want to cut interest rates,” said James Genetzke, CFO at Exodus. Decryption.
While prices decisions may not be clear until future data is released, investors believe “we need to be careful about his tone, which is just as important as the details.”
“Bitcoin and crypto assets are sensitive to global liquidity conditions and need to respond favorably to further signals as the Fed continues its incredible path.” Decryption.
However, Hawkish Tone can cause new sales in stocks and crypto.
However, Genetzke also offered a nuanced view, noting that the crypto market cycle was “atypical due to regulatory tailwinds” and institutional adoption “can alleviate the Hawkish Powell’s blow.”
O’Shea repeated the sentiment, claiming that negative short-term decisions about rates would not affect long-term crypto investment cases, supported by institutional adoption from the White House and favorable policies.
