Many market participants expect Powell to reinforce the central bank’s goal of fighting inflation
During last week’s slide, the bitcoin price managed to hold above the $20,000 figure to stage a modest bounce eventually. The largest cryptocurrency by market capitalization looks relatively steady these days, holding above $21,000 on Thursday. Yesterday, the BTCUSD pair was rejected from the $21,800 zone that now represents the immediate upside target for the coin.
The technical picture now looks like a consolidation phase before another possible sell-off, with downside risks persisting despite the recent bounce. If bitcoin fails to clear the $22,500 zone in the near term, the downside momentum could reemerge. However, it may be too early to bet on another decline, especially as stock markets started to shrug off the recent selling pressure. Wall Street indices rebounded overnight, snapping a three-day decline.
Also, volatility could pick up again both in the traditional financial markets and crypto space as investors are awaiting the Jackson Hole economic symposium with Federal Reserve Chair Jerome Powell slated to speak on Friday. Many market participants expect Powell to reinforce the central bank’s goal of fighting inflation, thus pushing stocks lower along with bitcoin.
In other words, BTC could come under renewed downside pressure ahead of the weekend, with the $20,000 handle staying in the market focus. A failure to hold above this level would open the way towards the $17,600 zone that helped cap the plunge in June.
Of note, unlike Wall Street indices, bitcoin refrained from a sell-off recently, suggesting it has turned somehow disconnect from the traditional market. Anyway, it looks like some big moves are imminent for BTC after a period of reduced volatility. On the positive side, the global cryptocurrency market cap rose about 2% over the last 24 hours and was last trading at the $1.04 trillion mark.