Bitcoin (BTC) kept pressure on $28,500 after the Oct. 19 Wall Street open ahead of a key speech on United States economic policy.
Lepard: Powell may flip “very dovish”
Due to speak at the Economic Club of New York at 12pm eastern time Thursday, Powell faces a complex macroeconomic scenario with U.S. ten-year bond yields at their highest since 2007.
With the ghost of the 2008 Global Finance Crisis on market participants’ radar, the extent to which Powell’s language would be dovish or hawkish was the key talking point.
“They can’t let the bond rout continue,” Lawrence Lepard, asset management guru Lawrence “Larry” Lepard told X subscribers on the day.
“Prediction: Powell is on the verge of saying or doing something which is very dovish which will cause a massive rally in the US Bond market.”
In the wake of various data prints showing inflation persisting beyond expectations, the Fed was previously thought to be planning an extended period of high interest rates.
Per the latest data from CME Group’s FedWatch Tool, market odds of rates remaining at current levels at the next meeting of the Federal Open Market Committee (FOMC) on Nov. 1 were nonetheless at 88% — versus a mere 11% chance of a further hike.
Speaking on CNBC’s “Squawk Box” segment, economist Mohamed El-Erian suggested that rates should not rise again — a more advantageous outcome for risk assets, including crypto.
“The message to give right now is the Fed is done, we are done,” he said about the content of Powell’s speech.
“That’s what the message should be. Whether he gives it or not, I don’t know.”
Bitcoin traders monitor liquidity walls
BTC price movements themselves meanwhile stayed locked in place between clouds of liquidity, with volatility reduced as a result.
#Bitcoin Currently being held in between two big walls on Binance futures.
Open Interest rising steadily as funding rates trend down.
Let’s see what we’ll get after the NY open today! pic.twitter.com/nyLMQ07XFo
— Daan Crypto Trades (@DaanCrypto) October 19, 2023
Data from on-chain monitoring resource Material Indicators confirmed that the picture remained…