Thursday, 2 February 2023

Crypto News

Bitcoin price briefly loses $20K on ‘bunch of nothing’ Powell speech

Bitcoin price briefly loses $20K on 'bunch of nothing' Powell speech

Bitcoin (BTC) analysts were keen to draw fresh price targets on Aug. 27 after the largest cryptocurrency briefly fell below $20,000.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Sub-$20,000 BTC price targets stay in place

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting $19,945 on Bitstamp the night after hawkish comments from the United States Federal Reserve. 

Intraday losses for the pair neared 9% and United States equities cratered over the outlook for inflation policy, which looks to increasingly abandon the “soft landing” narrative.

“Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth,” Fed Chair, Jerome Powell, said in a speech at the annual Jackson Hole economic symposium.

“Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”

Adding that quantitative tightening, known as QT, could remain “for some time,” Powell sparked a major volatility spike to the downside across risk assets.

As Cointelegraph reported, U.S. stocks lost a combined $1.25 trillion in a single session — more than the entire crypto market cap.

Bitcoin managed to regain $20,000 on the day, and was hovering near $20,200 at the time of writing, nonetheless still near one-month lows.

For traders, it was now a question of a relief bounce followed — potentially — by even heavier losses.

“$BTC went lower than expected, but the idea is still the same. First up to liquidate late shorts, then down,” popular Twitter account Il Capo of Crypto told followers in the first of several updates on the day.

Continuing, Il Capo of Crypto painted short-term relief targets between $23,000 and $23,500, but to the downside, $19,000 and $16,000 were now in play.

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