Bitcoin’s movement has been in an upward trend for the last week, although it is still within a narrow range. However, volatility could occur as bears and bulls battle over monthly candle close. Over long time frames, the benchmark is still trading in red and has not been able to recover any gains made last week.
Bitcoin (BTC), which trades at $20,000.300, has seen sideways movements in the last 24 hours, and an average 6% decline over the week. Bitcoin (BTC) is also the worst performer among the top 10 crypto market caps.
A recent report shows that QCP Capital is a trading company. sharedHere are some thoughts about current market conditions. U.S. Federal Reserve (Fed), and its monetary policies are strongly influencing the crypto market and all global markets.
Fed Chairman Jerome Powell spoke last week in Jackson Hole. According to QCP Capital it was addressed specifically to the market. Bitcoin prices and large cryptocurrency values were trending up before Powell’s speech but then quickly fell as Powell became hawkish.
The trading firm believes the U.S. financial institutions “failed again” with their communication strategy. The Fed provided more uncertainty than clarity to markets and gave them a path.
Inflation in the U.S. Dollar has been slowed by the Consumer Price Index (CPI) by raising interest rates. In an effort to beat the Fed, markets priced in possible future increases.
Accordingly, QCP Capital has stated that market participants have priced in a 95% chance of another 75 basis point (bps), hike after Jackson Hole. The current bearish market for Bitcoin and crypto markets could continue. This was the statement of the trading house:
Mkts have already priced in a 90% probability of 75bp increases. This seems quite high considering that neither these data pieces are yet available. Markets know the Fed is planning to increase 75bp in order to cover the 2mth intermeeting interval between the July FOMC and July.
How to Expect Bitcoin in September
Fed Chair stated that the Fed’s upcoming interest rates increase would be based upon the CPI as well as the Nonfarm Payroll indicator (NFP), which is used to calculate the U.S. workers outside of the agriculture sector. This indicator can be “unpredictable” which adds to the current uncertainty in global markets.
To determine the Fed’s next approach, it will need to be determined by CPI and September NFP. QCP demonstrated that one indicator could give insight into the trajectory of another.
Markets will have to adjust pricing to reflect a Friday NFP loss. CPI readings at or near the end of last month or a flat/negative M/M will give Fed permission to lower its rates to 50bp increases starting in September.
This could allow for some additional relief in Bitcoin prices and the cryptocurrency market.