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Bitcoin price outlook ahead of Powell’s Jackson Hole speech

By: Invezz
Federal Reserve Building

Bitcoin (BTC/USD) has touched an intraday low of around $21,376 across major exchanges according to data from CoinGecko. This follows a rejection near $21,740, and suggesting further weakness could push the price towards 7-day lows below $21k.

But what’s its outlook ahead of US Federal Reserve Chair Jerome Powell’s Jackson Hole speech?

Bitcoin to shadow equities’ reaction to Powell speech

The Jackson Hole symposium, which brings together central bankers, economists and other key policymakers, is an annual event that has often come with increased market volatility around highly anticipated commentary.

The S&P 500 market, for instance, has built in the sentiment that the central bank will ease rates in coming months before pivoting later next year. It’s a scenario that had the markets tracking significant bounces from June lows, with inflation seen as stabilising and an easing Fed seen as one that provides fresh legs for bulls.

So, as with the equities markets, Bitcoin might rally higher if the Fed Chair hints at lower rates after the September hike.

Keith McCullough, the CEO of Hedgeye Risk Management, says “anything dovish” could see Wall Street pump.

HIKES: they set this #JacksonHole #Powell commentary up with peak hikes already priced into 2s

Anything "dovish" is going to get pumped like Oil by ye Olde Wall and its media

— Keith McCullough (@KeithMcCullough) August 26, 2022

But if the Fed chooses to go tighter for much longer, then the markets will likely react lower over coming days.

Such an outcome will likely wipe out gains seen over the past month, with volatility pushing risk assets to fresh lows. Market analyst Tar points to a proper reaction when stocks open on Monday.

The big rally we have seen in past 2m is cause market believes Fed will not be as aggressive in hiking rates as it has been so in H1 of this yr

Any indications from Powell today @ Jackson Hole to contradict that could unravel all the rally of last 2m

Expect volatility on Mon

— Tar ⚡ (@itsTarH) August 26, 2022
Can bulls hold above $20k?

BTC has traded above the $20,000 level for weeks, the level providing a robust support during the recent sell-off from $25k. Some market observers see the zone as continuing to act as a strong buffer, although a breakdown to June lows is still possible with the current macro outlook.

Bitcoin analyst Carl Runefelt says that BTC looks weak on the 4-hour chart and that it risks falling to $20,800, potentially opening up a path for further declines towards the $20k level or lower.

The post Bitcoin price outlook ahead of Powell’s Jackson Hole speech appeared first on Invezz.

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