After Bitcoin last week hit a two-month high, the biggest cryptocurrency has repeatedly failed to breach the $25,000 resistance mark.
Bitcoin drops above $20,000 after Powell's speech
After bitcoin last week reached a two-month high, the largest cryptocurrency repeatedly failed to convincingly breach the $25,000 resistance mark and was eventually sent in a different direction, dropping below $21,000.
Since the beginning of this week so far, the digital currency has lost about 6,31% of its value, and over the course of July it has incurred losses of about 17,24%, and in the past six months, the Bitcoin has fallen by 54.67%.
risk management
The price of Bitcoin continued to decline during the first half of 2022 and so did the stock market, as investors turned to the well-performing assets at a time of a slowing economy, high inflation and high interest rates.
As the cryptocurrency is still widely viewed as a risky and speculative asset, this “risk-aside” trade sent bitcoin below $20,000 in mid-June and again in July, representing a loss of more than About two-thirds of the value that bitcoin reached at the November 2021 peak of $69,000, with no signs of a continued recovery in sight, concerns about rising electricity use associated with bitcoin mining and the ban on cryptocurrency transactions by China have also weighed on the value of bitcoin.
sector is affected Crypto And other global markets are strongly influenced by the US Federal Reserve (Fed) and its monetary policy. Last week, Federal Reserve Chairman Jerome Powell delivered his highly anticipated speech at the Jackson Hole Symposium directed at the markets, and the price of Bitcoin and other major cryptocurrencies was trending upwards before the speech, But it soon returned to decline as Powell turned to hawkish politics.
Experts believe that US financial institutions have "failed again" in their communication strategy, as instead of providing markets with clarity and a roadmap, the Fed has brought in more uncertainty and instability.
The central bank is trying to slow inflation by raising interest rates, and the markets have been trying to preempt the Fed and price its upcoming increases, so after Jackson Hole experts see the market there is a 90% chance of a rate hike of another 75 basis points, and that's likely to be a continuation For the current bearish scenario for bitcoin and crypto market.
Bitcoin forecast for september
The Fed chief said earlier that the next rate hike will depend on the consumer price index and the non-farm payroll index (NFP) used to measure the number of workers in the United States outside the agricultural sector, this indicator could be "unexpected", which increases the case The current uncertainty in global markets, the NFP and CPI for September will be important to determine the Fed's next approach.
We believe that the significant NFP loss will force the markets to re-price the interest rate to around 60%, and CPI stability at the same levels as last month or less will allow the rate hike to shift around 50bps in September from 75bps.
A professional technical and economic analyst in global financial markets since 2004. He holds a Master’s in Business Administration from the American University in Cairo. He works as an economic writer and technical analyst for many international financial companies. He writes daily economic and technical analyzes for many Arabic and English websites specialized in the field of stock exchanges and financial markets.
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