The Jackson Hole Effect? Powell’s Speech Sparks Bitcoin Fears Amid Similar 2022 Price Action
As Jerome Powell, the Federal Reserve (Fed) Chair, prepares to return to Jackson Gap this Friday, the Bitcoin (BTC) market is experiencing a way of anticipation because of the similarities within the present value motion in comparison with the interval main as much as final 12 months’s speech.
Key shifting averages have been examined and misplaced over the previous two weeks, adopted by a interval of consolidation, harking back to earlier occasions.
Nevertheless, it is very important be aware that these similarities don’t assure a repeat of the previous, as market circumstances and Powell’s stance have since developed.
Déjà Vu In The Bitcoin Market?
According to Keith Alan, co-founder of study and crypto analysis agency Materials Indicator, final 12 months, within the two weeks previous Powell’s speech, BTC’s value broke by means of essential technical assist ranges represented by the 21-day, 50-day, 100-day, and 200-week Transferring Averages (MA).
Subsequently, a interval of consolidation ensued, adopted by a big value drop in response to Powell’s hawkish tone through the speech. Alan said:
Bear in mind when Fed Chair Powell spoke from Jackson Gap final 12 months and his hawkish tone triggered a 29% BTC dump that took 5 months to get better?
Notably, the latest value motion within the Bitcoin market has displayed similarities to final 12 months’s sample. Over the previous two weeks, Bitcoin has examined and misplaced these similar key shifting averages, and it’s at present present process a part of consolidation, mirroring the occasions main as much as Powell’s earlier tackle.
Keith Alan emphasizes that since final 12 months’s Jackson Gap occasion, there have been notable adjustments. Core inflation has decreased, and Powell’s strategy to communication has change into extra “measured”.
It’s unsure whether or not Powell will undertake a hawkish or dovish stance in his upcoming speech, making it difficult to foretell the market’s response with certainty. What is clear, nevertheless, is that the market is primed for a big transfer.
Moreover, Alan means that the formation of a decrease low in value will increase the chance of an extension of the prevailing downtrend. Market members must be ready for the potential of additional testing of assist ranges.
Because the Bitcoin market awaits Powell’s speech, market sentiment stays dynamic. Merchants and traders are anticipating potential market-moving cues from the occasion.
Because the date of Jerome Powell’s return to Jackson Gap approaches, Bitcoin has displayed a notable restoration of two.1% throughout the previous 24 hours, marking a constructive upward motion that brings it nearer to the $27,000 threshold.
Nevertheless, it’s essential to notice that if the end result of Jerome Powell’s speech on Friday proves favorable for crypto traders and propels Bitcoin’s value to greater ranges, the cryptocurrency might encounter a big impediment within the type of its 200-day shifting common positioned at $27,200.
Featured picture from iStock, chart from TradingView.com
