As Jerome Powell, the Chair of the Federal Reserve (Fed), prepares to give his speech at Jackson Hole this Friday, there is a growing sense of anticipation in the Bitcoin (BTC) market. This is due to the current price action being similar to the period leading up to last year's speech. Key moving averages have been tested and lost over the past two weeks, followed by a period of consolidation, which is reminiscent of previous events. However, it is important to note that these similarities do not guarantee a repeat of the past, as market conditions and Powell's stance have since evolved. Powell's speech sparks bitcoin fears.
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Powell's speech sparks bitcoin fears. Déjà Vu In The Bitcoin Market?
Keith Alan, co-founder of Material Indicator, a firm that conducts analysis and research on cryptocurrency, reported that BTC's price broke through key technical support levels represented by the 21-day, 50-day, 100-day, and 200-week Moving Averages (MA) in the two weeks leading up to Powell's speech last year. After a period of consolidation, the price dropped significantly in response to Powell's hawkish tone during the speech, according to Alan.
Remember when Fed Chair Powell spoke from Jackson Hole last year and his hawkish tone triggered a 29% BTC dump that took 5 months to recover?
The recent price action in the Bitcoin market has shown similarities to last year's pattern. Bitcoin has tested and lost key moving averages over the past two weeks, and it is currently in a consolidation phase, similar to the events leading up to Powell's previous address. Since last year's Jackson Hole event, there have been notable changes, with core inflation decreasing and Powell's approach to communication becoming more measured. It is uncertain whether Powell will adopt a hawkish or dovish stance in his upcoming speech, making it challenging to predict the market's reaction with certainty. However, the market is primed for a significant move. The formation of a lower low in price increases the likelihood of an extension of the existing downtrend, and market participants should be prepared for the possibility of further testing of support levels. As the Bitcoin market awaits Powell's speech, traders and investors are anticipating potential market-moving cues from the event.
Bitcoin has seen a 2.1% increase in the past 24 hours as Jerome Powell's return to Jackson Hole approaches. This positive movement brings it closer to the $27,000 threshold. However, it's important to note that if Powell's speech on Friday is favorable for crypto investors and causes Bitcoin's price to rise further, it may face a challenge when it reaches its 200-day moving average at $27,200.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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