Bitcoin (BTC) shows the strength of the $113,000 area awaits the speech the US Federal Reserve president will give at the Jackson Hole Symposium this Friday.
When this article was published, Bitcoin was negotiated at $113,400, 8.8% below its history maximum (ATH) According to the cryptocurrency calculator, it is $124,500.
The following graph provided by TrainingView shows how BTC prices have moved this year.
Investors know what happened this Thursday in Wyoming, USA, where the Jackson Hole symposium is being held. The meeting that brings together central bankers, finance ministers, economists and investors will have Powell as the great hero scheduled to speak on Friday.
The market closely tracks each word to see if the head of the Fed is providing a signal for the next decision of the institutions holding their next meeting in September to define US monetary policy.
Despite expectations, everything shows it Powell probably chooses a measured speech and avoids progressive cuts in interest ratesa position to reduce market confidence and strengthen its bearish vision. Instead, if you proceed with the cut, the effect will be bullish. Therefore, we expect high volatility days.
This is reflected in the FedWatch indicator in the CME group. Over a week, the probability of a 25 base point rate reduction in September will drop from 94.3% to 79.1%, and it could continue to fall even if Powell continues talking.
The fact that interest rates are maintained high (currently in the 4.25% to 4.50% range) Clashes with financial markets including BTC and cryptocurrency. This is because at high rates, the liability is more expensive and the liquidity available is less.
When this occurs, risk and appetite for investors disappear, choosing to place holdings in cash or treasure liabilities, considered a safe shelter, offering attractive yields for many in a high rate context.
