The Price Of Bitcoin Briefly Drops By $20K During Powell’s Speech
On August 27, following a brief dip below $20,000 for the largest cryptocurrency, Bitcoin (BTC), analysts were eager to set new price goals.
Targets for Bitcoin prices below $20,000 remain in place
The following evening, BTC/USD reached $19,945 on Bitstamp in response to the US Federal Reserve’s harsh remarks.
United States shares plunged over the inflation policy outlook, which appears to be gradually abandoning the “soft landing” narrative, and intraday losses for the pair came close to 9%.
“Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth” Fed Chair, Jerome Powell, said in a speech at the annual Jackson Hole economic symposium.
“Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”
Powell’s statement that quantitative tightening, or QT, may continue “for some time,” caused a significant increase in downward volatility across risk assets.
More money was lost on U.S. equities than on the whole crypto market value in a single session, losing a combined $1.25 trillion.
Despite still being close to one-month lows, Bitcoin managed to recover $20,000 on the day and was trading around $20,200 at the time of writing.
For traders, the choice now was between a solace rally and perhaps even bigger losses.
“Bitcoin went lower than expected, but the idea is still the same. First up to liquidate late shorts, then down” popular Twitter account Il Capo of Crypto told followers in the first of several updates on the day.
Il Capo of Crypto continued, painting goals for short-term relief between $23,000 and $23,500, but on the downside, $19,000 and $16,000 were now in play.
Others considered the possibility of increased Bitcoin accumulation if the $20,000 support level were to be repeatedly violated.
In such a decline, fellow account TraderSZ saw $19,400 as a potential bounce zone, with respite extending to the weekly open near $23,000 before June’s $17,600 returned to the picture.
Key trendlines from previous bull markets were now overhead for BTC/USD, meanwhile. The 200-week moving average (MA) was close to $23,000, while the realized price was $21,600.
“$21,100 serves as resistance moving upward. Support starts around $19850 and rises to $19,200, “trading platform Part of an overview of the present situation was added by Decentrader.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews