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Temporary Calm Before Jerome Powell’s Address at Jackson Hole

All eyes remain fixed on Bitcoin (BTC), as the market continues to be watchful within a narrow trading range extending over several days, and August 23 is no exception. Presently, attention is directed towards Jerome Powell’s address at the annual Jackson Hole event. Investors eagerly anticipate his insights on monetary policy and the global economic landscape.

Variations in Trends and Growing Implications:

Since August 19, Bitcoin (BTC) has been moving within a price range bounded by $25,800 and $26,300. This reflects increasing variations in traders’ perspectives following its 12.5% decline this month. At the moment, the market seems to lean towards calmness in the upcoming days leading to the Federal Reserve’s gathering in Jackson Hole from August 24-26.

Impact of Jerome Powell’s Words and Market Confidence:

It is expected that Jerome Powell, the Federal Reserve Chair, will deliver his speech about the global economic outlook on August 25. He will share his thoughts on interest rates. According to the minutes of the Federal Reserve’s meeting in July, concerns about persistent inflation have surfaced, which could prompt another increase in interest rates in September.

Back in July, Powell affirmed that the Federal Reserve would scrutinize economic data during each meeting and continue with its restrictive policy until sufficient confidence is built in achieving the targeted 2% inflation. Nevertheless, the CME FedWatch Tool, assessing overnight rate directions, indicates an 84.5% probability that the Federal Reserve will maintain unchanged rates between 525 and 550 basis points.

The Dollar’s Influence on Bitcoin:

Similarly, the U.S. Dollar Index (DXY) exhibits consistent movements in recent days. Notably, the index increased by 0.2% on August 22, remaining within the trading range of 103 to 103.68. Investors await rate signals through Jerome Powell’s words.

Glimpse of the Future and Rebound Opportunities:

We have observed Bitcoin’s decline in August, leading the daily Relative Strength Index (RSI) to its most oversold state since June 2022. Oversold RSI typically indicates an upcoming price rebound, potentially driving Bitcoin towards the range of $26,500 to $27,500 (the green zone) by September.

This range acted as support in March and May 2023 and also aligns with Bitcoin’s 200-day Exponential Moving Average (EMA; the blue wave) at approximately $27,225. Conversely, if the downtrend continues, bears might target the range of $24,750 to $25,350 (the red area) by September.

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