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Bitcoin Readies for Fed as $61K Sets the Stage for Breakout

DailycoinDailycoin2024/08/24 00:12
By:Dailycoin
  • The market has anticipated Jerome Powell’s speech to impact Bitcoin.
  • Traders have anticipated a September rate cut, priced in at 100%.
  • Previous rate cuts have given mixed signals for Bitcoin’s price.

As August 23 unfolds, Bitcoin (BTC) is holding steady near intraday highs, with traders and investors eagerly awaiting the Federal Reserve’s highly anticipated speech at the Jackson Hole Economic Symposium. This annual event is poised to provide crucial signals on future monetary policy, which could significantly influence cryptocurrency markets.

Bitcoin Awaits Fed Chair’s Rate Cut Hints

Bitcoin currently hovers around $61,000 in the hours leading up to the symposium. The key focus of the event is a speech by Federal Reserve Chair Jerome Powell, scheduled for 10 a.m. Eastern Time. 

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Market participants are closely scrutinizing Powell’s remarks for any indications of changes in financial policy, particularly regarding interest rate adjustments. According to the data, there is a prevailing expectation of interest rate cuts starting in September, with markets pricing in a 100% chance of this bullish development. 

The primary debate now centers on whether the Fed will implement a 25 or 50 basis point cut. The CME Group’s FedWatch Tool currently suggests a greater likelihood of a 0.25% reduction. Despite these anticipations, some analysts, including former Fed official Lou Crandall, have expressed skepticism about Powell delivering any new guidance at Jackson Hole. 

Can a Rate Cut Break the Stalemate?

Crandall indicated that while a quarter-point cut seems likely, the Fed might not provide additional insights now. Historically, rate cuts have not always translated into immediate price movements for Bitcoin. 

Trader Luke Martin highlighted that during the Fed’s previous rate-cutting cycle in 2019, Bitcoin experienced a minor price decline before the COVID-19 market crash triggered a bull run. As Bitcoin continues to trade within a narrow range, with $62,000 acting as a key resistance level, market watchers are attentive to potential breakouts. 

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CoinGlass data showed an additional block of sell orders around $61,435, contributing to Bitcoin’s current price stability. On the 4-hour charts, BTC/USD traders monitor its interaction with the 200-period simple moving average, with predictions suggesting a potential rise to $64,000-$65,000 if resistance is overcome.

On the Flipside

  • The Fed’s decisions may have less impact on Bitcoin than anticipated, given historical instances where rate cuts did not directly lead to Bitcoin volatility.
  • Bitcoin’s $62,000 resistance level could be a major barrier, potentially leading to further consolidation before a breakout.

Why This Matters

The Federal Reserve’s upcoming speech and expected interest rate cuts are critical for Bitcoin, as they can impact investor sentiment and price trends. Historical reactions and current technical indicators, like resistance levels, highlight Bitcoin’s potential price movements and market stability, making these economic signals highly influential.

To learn more about how economic factors like money supply and interest rates might influence the price of Bitcoin, read here:
Bitcoin Eyes ATH as Economic Tailwinds Fuel Market Optimism

Curious about the recent large Bitcoin transfers from Mt. Gox and their impact on the market? Read more here:
Bitcoin Stays Firm as Mt. Gox Unleashes a Whopping $782 Million

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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