When the crypto bear or bull period starts, analyze the facts
August 26 is the long-awaited day for a critical shift in the crypto market’s price movements. At the end of today, the bears or bulls will take over the market, although everyone is hoping for a reversal of the bearish trend.
Remember, the latest inflation data announcement did not push the market down. Instead, investors saw some price gains. But from this week’s price movement, it is clear that the rise has slowed.
But another move could take place after the Federal Reserve’s annual meeting.
Federal Reserve Annual Meeting
Every year the Federal Reserve convenes a meeting of many economists. The host of this meeting is usually Jackson Hole, where the central bank sets its annual economic agenda.
The data on US personal consumption expenditure MoM will be revealed during the meeting today. This information is another critical inflation data that will reveal the nature of the crisis. Additionally, this data will show whether people are spending more now or less, indicating a healthy or unhealthy economy.
Apart from announcing the MoM for personal consumption, the crypto market is also worried about the Federal Reserve’s plan to curb inflation. Interested investors can watch Jerome Powell’s speech on the Kansas City Federal YouTube channel.
Why should crypto investors be concerned?
Recall that Neel Kashkari, CEO and President of the Minneapolis Fed, made some comments a day back stating that he expected the Volcker-like approach. According to history, Paul Volcker was Federal Reserve Chairman in 1927. During rampant inflation in the United States, Volcker created two brief but massive recessions to halt spending and reduce inflation.
By making such proposals, Kashkari believes that the Federal Reserve should create recessions to stop inflation. As one of his dovish Feds officials, his statements have worried many people in the crypto sector. This is because others, like James Bullard, the president of St. Louis, were even the ones who took the toughest stance in the past.
So the scale can be tipped to both sides in today’s meeting. If current central bank chief Jerome Powell now agrees with others, the crypto market will become more bearish. But if he decides to solve the inflation peacefully, the crypto market will move bullishly.
From the above expectations, it is clear that the Federal Reserve has the power to create a recession. Therefore, the outcome of the meeting now depends on how Jerome Powell will decide to tackle inflation, dove or hawk.
Featured image from Pexels, charts from TradingView.com
