Bitcoin Sits On Critical Support As Ethereum Tackles Sub-$1,500 Bears ⋆ ZyCrypto

After losing over 10% to touch $20,700 on Friday, Bitcoin traded sideways for most of Monday, ticking along with other cryptoassets as investors took a backseat to macroeconomic uncertainty. At the time of writing, BTC was trading at $20,271 after a 1.22% drop in the last 24 hours, while Ethereum was trading at $1,537 after a 3.5% drop over the same period.

Last week’s flash selling was spurred by concerns that the Fed could continue its aggressive inflation policy, given that inflation remains high. Onchain metrics also showed an increase in BTC inflows, with people’s fears returning to June levels again.

On Friday, Fed Chair Jeremy Powell is expected to speak at the US central bank’s annual economic symposium in Jackson Hole, Wyoming – the most important event on the economic calendar this week. According to The Bank of America (BoFA), the Fed is likely to continue to press ahead with its tight policy despite the likelihood of a soft landing for markets following Powell’s speech on Friday.

“While we expect the chairman to say the pace of rate hikes may slow from the big 75bp hikes the Fed has adopted recently, Powell is likely to communicate that the committee continues to believe a restrictive policy is appropriate. wrote the bank.

After July’s hawkish FOMC minutes, the Fed is expected to deliver another rate hike of 75bp in September. Investors remain divided, however, with some believing the Fed could push back on that plan to 50bps in September and November plus another 25bp in December, given the improving inflation numbers. According to “Venturefounder”, an analyst at Crypto Quant, this mix-up could further affect the markets.

“We [could] cut around $20k for the next 30 days until the September FOMC meeting when inflation remains bad. If the Fed sends hawkish signals, BTC dumps and bottoms at $15k, then gradually recovers over the next 90 days, ending the year at $29k.” Said Venturefounder

Furthermore, investors will look at the personal consumption price index (PCE) on Friday. What is so important about PCE data is that the Fed has publicly stated that it is their preferred measure of inflation in the economy, making this data point even more significant than the CPI.

“Since this metric has yet to peak, the Fed is keen to continue tightening,” said ‘Tedtalksmacro’. But the expert noted that the consensus is that PCE peaked in June and that Friday’s data will confirm this. “If true, that’s significantly bullish for risk assets like Bitcoin + stocks.”