Bitcoin price chops below $22K as traders remain risk-off ahead of Jackson Hole
(Kitco News) - Thursday saw another day of subdued price action in the cryptocurrency market as the financial world’s attention remains fixed on tomorrow’s Jackson Hole Summit, with a majority of traders taking a risk-off approach until finding out the Fed's next monetary policy decision.
Bitcoin bulls continue to have problems mounting a challenge to bearish resistance at $22,000, which has led to an extended period of choppy price action in the range between $21,300 and $21,850 according to data from TradingView.
BTC/USD 4-hour chart. Source: TradingView
Kitco Senior Market Analyst Jim Wyckoff noted the diminished price action across the market in his morning Bitcoin brief and suggested that “Bears have the slight overall near-term technical advantage.”
According to Wyckoff, “The recent pause has also produced a “collapse in volatility,” which suggests a bigger price move is on the horizon. Market prices tend to move from periods of higher volatility to periods of lower volatility.”
A 5-day uptrend for Bitcoin
While the low volatility of the past few days has bored many traders in the space, market analyst Rekt Capital was quick to point out that Bitcoin has been on a technical uptrend for the past 5 days.
#BTC hasn't been moving drastically towards the upside— Rekt Capital (@rektcapital) August 25, 2022
That being said, it has been in a technical uptrend for the past 5 days or so
As long as the technical uptrend continues to hold like this, $BTC should be able to enjoy some acceleration to the upside#Crypto #Bitcoin pic.twitter.com/ATB67L5fhs
Whether or not the uptrend can continue will likely depend on how the markets respond to comments from Fed Chair Jerome Powell on Friday.
While many in the community are banking on a “Fed pivot” narrative where interest hikes will be curtailed below 0.25 basis points along with the reintroduction of quantitative easing, the central bank’s 2% inflation target suggests that any notions of a near-term dovish pivot are pure fantasy.
Insight into what it might look like following a breakdown in prices that result from hawkish comments out of Jackson hole was provided in the following tweet from cryptocurrency analyst il Capo of Crypto, which indicates a possible pullback to $16,000 for BTC.
The power of the hammer. pic.twitter.com/ayxELfsBdz— il Capo Of Crypto (@CryptoCapo_) August 23, 2022
As for now, all the market can do is patiently wait for the comments from Powell.
A snoozefest in the altcoin market
Thursday’s action in the altcoin market also reflected a holding pattern by traders who are content to wait on the sidelines until more favorable conditions arise.
Daily cryptocurrency market performance. Source: Coin360
Out of the top 200 coins by market cap, the only performances of note were a 13.06% gain for Decred (DCR), an 8.56% gain for Ultra (UOS) and an 8.54% gain for Theta Fuel (TFUEL).
The overall cryptocurrency market cap now stands at $1.042 trillion, and Bitcoin’s dominance rate is 39.6%.