The price of Bitcoin has dropped by 1.5% in the past 24 hours, falling below $26,100. This decline comes after a period of historically low volatility and a selloff last week that brought Bitcoin to its lowest levels since mid-June. The market is currently awaiting the speech by Federal Reserve Chair Powell at the Jackson Hole Economic Symposium, as his words are expected to have an impact on crypto and stock markets. The Fed’s actions to control inflation by raising interest rates have weighed heavily on Bitcoin and other cryptocurrencies, as higher rates make riskier investments less attractive.
Traders’ expectations for the outlook of interest rates have been shifting, leading to fluctuations in digital asset prices. The Fed’s commitment to fighting inflation and signs of a strong economy suggest that interest rates will remain higher for a longer period. However, there are also concerns about a “hard landing” where the Fed’s attempts to control inflation could lead to an economic slowdown. Powell’s speech at Jackson Hole will be closely analyzed by investors to gain insights into the future path of the Fed’s policies. Whether the price of Bitcoin reacts positively or negatively to Powell’s speech, it is expected to face difficulties in showing a clear direction leading up to the next Fed policy meeting in September.
In addition to Bitcoin, other cryptocurrencies like Ether, Cardano, Polygon, Dogecoin, and Shiba Inu have also experienced price declines. The overall sentiment in the crypto market seems cautious and tense, and any hawkish surprises from Powell’s speech could potentially lead to a mild rebound. However, given the current market conditions, it is unlikely that there will be a clear direction for cryptocurrencies until after the Fed policy meeting in September.