Weak crypto market ahead of Jackson Hole: all eyes on Powell
After the strong rally in the past weeks, crypto investors are easing off the gas.
After the strong rally in recent weeks, crypto investors are easing off the gas. Bitcoin is moving sideways around the $115,000 mark, while Ethereum has lost more than one percent in the last 24 hours. For most altcoins, the losses are even larger.
The wait-and-see stance is all about the annual Jackson Hole symposium, which runs from August 21 through 23. Investors hope that Fed Chair Jerome Powell, in his Friday speech, will provide clarity on the future path of U.S. monetary policy. Expectations for rate cuts have faded in recent weeks due to solid macro data.
Also, the minutes from the latest FOMC meeting, published on Wednesday, could move the markets. Currently, futures markets price an 84 percent chance that the Fed will cut rates by 25 basis points on September 17.
Historically, Jackson Hole has regularly been the scene for monetary policy shifts. Five years ago, Powell announced a fundamental change: the Fed shifted from a strict inflation target to an average inflation target. That gave more room for higher inflation periods, which back then gave risk assets like crypto a boost.
On the Polymarket markets, mixed expectations are taking shape. Traders see the odds as the highest (44 percent) that Bitcoin will trade below $111,000 by the end of August. For Ethereum, sentiment is more positive: 34 percent expect a price above $4,800. Still, the same caveat applies: if Bitcoin slides lower, the number two crypto is likely to follow.
