Bitcoin (BTC) starts a new week fresh from a new multi-week low amid a return of highly nervous sentiment.After dipping below $21,000 over the weekend
Bitcoin (BTC) starts a new week fresh from a new multi-week low amid a return of highly nervous sentiment.
After dipping below $21,000 over the weekend, the largest cryptocurrency is consolidating around 10% lower than a week ago, and the fear across crypto markets is clearly visible.
As some call for new lows and others warns of a difficult few months ahead, there is plenty for bulls to contend with on both long and short timeframes
The United States Federal Reserve annual Jackson Hole symposium is due this week, while September is already due to form something of a showdown when it comes to inflation and associated macro price triggers.
That could mean fresh volatility across risk assets both during and prior, something weary investors will no doubt not welcome after last week’s escapades on BTC/USD.
Related: 3 reasons why the Bitcoin price bottom is not in
At the same time, miners are giving strong signals that the worst is over, with hash rate starting to rebound from a rare “capitulation” phase.
With that in mind, Cointelegraph takes a closer look at five market moving topics pertinent to Bitcoin traders in the coming days and beyond.
All eyes on Jackson Hole
The United States Federal Reserve is once again in the driving seat this week when it comes to potential macro price triggers for risk assets.
Fresh from last week’s Federal Open Markets Committee (FOMC) meeting, Fed officials, together with banking figures from around the world, will meet for the annual Jackson Hole symposium on Aug. 25-27.
This year’s gathering comes at a critical time for markets in the U.S. and further afield. Inflation under the Fed’s jurisdiction appears to have begun cooling, while elsewhere, the opposite story remains true.
The latest U.S. inflation data is still weeks away, but that might not stop Fed Chair Jerome Powell from giving strong hints as to how the Fed will react, as well as positioning expectations regarding future economic policy.
With that in mind, volatility could easily pick up both before and during the event, making Jackson Hole a key item to watch on traders’ radar.
“They are so focused on doing this partly just because they screwed up last year with the whole ‘transitory’ thing, and they realize that the one thing they can do now is tighten policy, and that will slow inflation,” Kevin Cummins, chief U.S. economist at NatWest Markets in Stamford, Connecticut, told Bloomberg.
With that, it remains to be seen whether the market will shift to favor another 75-basis-point funds rate hike in September or gravitate toward a lower 50-point raise.
In a preview of its Jackson Hole comments circulating online, Bank of America said that it would “continue to look for 50bp rate hikes in September and November, plus an additional 25bp rate hike in December.”
Rate hikes in themselves present headwinds for risk assets, and in turn provide a challenge for Bitcoin and its bid to escape strong correlation to asset classes such as U.S. equities.
BTC in for “ugly” six months
Bitcoin managed to stave off major volatility over the weekend, but still saw a new low for August as low-volume weekend trading conditions accentuated market moves.
After the sudden drawdown on Aug. 19, BTC/USD spent subsequent days eking out a low in an overall consolidation pattern, this continuing at the time of writing.
The low came in the form of a trip to $20,770 on Bitstamp, Bitcoin then adding $1,000 before returning to trade approximately in the middle of the two values.
The weekly close at $21,500 was troublesome, marking the lowest since the week of July 18 after last week’s candle cost bulls almost $3,000 or 11.6%.
Feels like $BTC preparing to head back below $20k soon.
Don’t get caught off guard.
— Ben Armstrong (@Bitboy_Crypto) August 21, 2022
With fear of a new low palpable among commentators, others argued that conditions were not unequivocally pointing to further misery.
For Cointelegraph contributor Michaël van de Poppe, BTC/USD may cap any dip at the CME futures close from Aug. 19, this lying at around $21,200. More difficult for the majority of the market, he implied, would be gains, given the overall bias for downside to enter.
“Probably around CME open, we’ll be seeing markets drop to $21.2K as that’s the close of Friday, and then everything is fine,” he told Twitter followers at the weekend.
“Still not inclined we’ll be seeing new lows. The overall period of accumulation and heavy correction on Friday causes panic. Pain is on the upside.”
Zooming out, however, Brian Beamish, founder of education suite The Rational Trader, left social media with no illusions over how the rest of 2022 should shape up for Bitcoin.
“Next 12-19 wks are gonna be ugly,” part of a tweet read.
“Once done, the floor for this cycle ought to be in – then we shall start it all over again.”
Beamish drew on experience of two…
cointelegraph.com