The decline in Bitcoin (BTC) and altcoins, which began last week with US macro data and decreasing expectations for a Fed interest rate cut, continues as markets prepare for a possible hawkish stance from the Fed.
As Bitcoin approaches a 6-week low, investors await the minutes of the Fed’s July meeting and Fed Chair Jerome Powell’s speech in Jackson Hole.
As expectations for a Fed rate cut in September waned, increased profit-taking and expectations of a possible hawkish statement from Powell pushed Bitcoin below $113,000.
Major altcoins like Ethereum (ETH), XRP, and Cardano (ADA) also experienced significant declines.
Speaking to The Block, Kronos Research CIO Vincent Liu said that Bitcoin is under pressure due to profit-taking and leveraged liquidations that followed Bitcoin reaching a new ATH earlier this month.
Liu stated that investors are currently moving away from risky assets and that he expects consolidation in the short term.
Stating that $4,200 is critical for Etheruem, the analyst added that if ETH fails to hold this level, the price could fall as low as 3,900.
“Investors are in wait-and-see mode and the market may consolidate until policy clarity emerges.
“For Ethereum, $4,200 is seen as a key support level. While efforts to hold this level are ongoing, a breakout could pose a risk of a drop to $3,900.”
Peter Chung, head of research at Presto Research, also said the market is dependent on Powell.
Chung stated that a moderate trend from Powell could push the cryptocurrency market up, saying:
The most important near-term event will be Powell’s speech in Jackson Hole this Friday. The market is already expecting a rate cut in September. If Powell says anything contrary to that, expect a sharp correction. However, if he takes a more moderate stance than expected, the market could recover.
*This is not investment advice.