Today, August 22, the cryptocurrency market is experiencing a decline as sentiment diminishes and traders anticipate Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole Symposium.
Summary
- The cryptocurrency market is down as investors await Jerome Powell’s address at Jackson Hole.
- Bitcoin and Ethereum ETFs faced significant outflows this week.
- BTC price has formed a double-top pattern on the daily chart.
Bitcoin (BTC) has fallen to a critical support level of $112,000, marking a 10% decline from its peak this year. Other cryptocurrencies including Fartcoin (FARTCOIN), Sky (SKY), and Chainlink (LINK) have also seen drops exceeding 5%, while the total market capitalization has decreased to $3.8 trillion.
Jerome Powell’s Speech at the Jackson Hole Symposium
The primary factor contributing to today’s decline in the cryptocurrency market is the anticipated speech by Jerome Powell at the Jackson Hole Symposium. This address is crucial as it may influence interest rate policies for the remainder of the year.
Powell’s remarks could suggest an interest rate cut in September, which many analysts predict. Alternatively, he might align with more hawkish figures, such as Beth Hammack, and caution about rising inflation.
There’s a possibility that Powell may adopt a neutral stance, indicating that the focus will remain on forthcoming jobs and inflation data before deciding on rate adjustments.
A dovish approach could provide a boost to the cryptocurrency market, while indications of sustained high rates could exacerbate the ongoing decline. In a statement to crypto.news, Gadi Chait, head of investment at Xapo Bank, commented:
“The immediate catalyst remains Powell’s Jackson Hole address and whether it provides clarity on the Fed’s rate trajectory – a dovish surprise could quickly propel Bitcoin back toward recent highs, while hawkish messaging risks testing the $108-110K support cluster where institutional buyers have historically stepped in during this cycle.”
Decreased Institutional Demand as ETF Outflows Increase
The cryptocurrency market is also impacted by diminishing institutional interest. Recent data reveals that spot Bitcoin ETFs experienced asset shedding for five consecutive days, with a loss of $194 million on Thursday, accumulating to over $1 billion in losses within that timeframe.
Similarly, spot Ethereum ETFs have lost over $700 million in assets this week, a stark contrast to previous weeks when they saw considerable inflows.
Technical Indicators Contributing to the Cryptocurrency Market Decline
The downturn in the cryptocurrency market is also associated with Bitcoin’s technical patterns. The daily chart illustrates a double-top formation at $123,000, which is considered one of the most bearish signals in technical analysis.
Bitcoin has stabilized at $112,000, the neckline of this formation. A hawkish comment from Powell could validate the bearish forecast and push BTC towards $100,000, while a dovish remark might elevate it, potentially revisiting the $123,000 level.
