Crypto market regains ground ahead of Key US Jackson Hole meeting

The crypto market on Tuesday saw cautious optimism ahead of a key annual meeting of global central bankers known as Jackson Hole Symposiumwith the prices of both bitcoin (BTC) and ethereum (ETH) climbing higher over the past 24 hours.

The Jackson Hole Symposium is scheduled to begin in Wyoming in the USA this Thursday, with US Federal Reserve (Fed) Chairman Jerome Powell was expected to give a closely watched speech on the economic outlook on Friday.

It is believed that Powell will use his speech to further steer expectations of the Fed’s interest rate policy, with some predicting that Powell will again take a more hawkish stance on monetary policy.

Among those who have warned of a hawkish Powell is David Duong, head of institutional research at Coin basewho wrote in a recent market commentary that the Fed chair is likely to signal a need for continued rate hikes in the US.

“Jerome Powell will more likely try to take a more measured approach in Wyoming and emphasize that the tightening cycle is not over yet,” Duong said, noting that the minutes of the last Fed meeting may have been interpreted as more dovish than the Fed had thought.

Duong added that bitcoin, as a result, may struggle in the short term, with the current technical analysis picture adding increased bearishness for the largest crypto.

“BTC is likely to retest support at [USD] 20,830 and [USD] 19,230 in the coming weeks,” Duong wrote, noting that Powell’s comments at the Jackson Hole symposium will be “watched” by traders.

A similar sentiment was also shared by analysts at the Singapore-based crypto trading firm QCP Capitalwho said in a recent market update that “Fed officials have actively pushed back on the dovish narrative in the market.”

“This has caused stocks to stall and trade lower, yields to drift higher and the USD to rise across the board,” the firm wrote.

The latest update followed a comment from earlier in August when the same firm said it expected the market to “remain supported” regardless of the Fed pushing back on the “dovish narrative.”

Other market players, such as Receive Capital Management founder Michael Kramer, also believed that Powell is likely to signal that interest rate increases will continue, albeit at a slower pace.

Kramer wrote in a market update from Monday that,

“I would expect Powell to make it quite clear that the pace of future rate hikes may slow, but that they have much longer to climb and are likely to remain high for some time.”

He added that Powell “needs to clearly articulate that rate cuts will not happen in the future until it is clear that inflation is on a downward trajectory.”

Meanwhile, the stock market in the United States has started to recover after many investors left earlier in the summer, the Wall Street Journal reported today.

The report cited data from a financial research firm Refinitive Lipper as mentioned investors have allocated a net USD 11.7 billion to mutual funds and exchange-traded funds (ETFs) in the past two weeks. It added that corporate earnings have also held up better than expected, noting that US inflation has recently fallen from its highs, potentially reducing the risk of aggressive interest rate hikes.

Bitcoin and other major cryptoassets are known to correlate relatively closely with stocks and other risk assets. As a result, cryptoassets generally react negatively to larger-than-expected interest rate increases.

As of Tuesday at 11:20 UTC, BTC was at $21,402, up 0.6% in the last 24 hours, and down 11.5% in the last 7 days. At the same time, ETH traded at USD 1,604, up 2% for the day and down 16% for the week.

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Learn more:
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