Cryptocurrencies taking a downturn: This date carries significant significance
In the world of finance, the upcoming speech by Fed Chair Jerome Powell at the Jackson Hole central bank gathering on Friday has taken centre stage. According to Peter Chung, head of research at Presto Research, this event is the most important near-term development for the market.
The outcome of Powell's speech is uncertain, but market expectations are that a rate cut is priced in for September. This anticipation, if contradicted by Powell, could lead to a sharp correction.
The recent price movements in Bitcoin and Ethereum, the two largest cryptocurrencies, have been influenced by investors positioning themselves ahead of this crucial event. Bitcoin last traded around $113,200, falling nearly three percent, while Ethereum plummeted more than five percent.
Ethereum, in particular, is battling to hold the key $4,200 level. If it manages to hold, it could attract buyers, while a break could open the door to $3,900.
The crypto market is experiencing selling pressure due to profit-taking and the unwinding of leveraged positions. This trend has also been seen in Ethereum ETFs, which have seen early outflows after a strong start.
For those who prefer a simpler investment approach, the "Bitcoin Direct ETP" and "Ethereum Direct ETP" from NxtAssets allow for easy investments in Bitcoin or Ethereum, similar to buying a stock. However, it's important to note that Börsenmedien AG, the publisher, holds a direct stake in nxtAssets GmbH, the issuer of these ETPs.
The minutes of the latest U.S. Federal Reserve meeting are also in focus today. The notable cooling trend in net inflows for Bitcoin spot ETFs in recent weeks adds to the intrigue surrounding the Fed's future monetary policy decisions.
If Powell sounds more optimistic than expected, the market could start a rally. On the other hand, a more cautious tone could trigger a sell-off. Regardless of the outcome, one thing is clear: the speech on Friday promises to shape the short-term direction of both the crypto and stock markets.
