Bitcoin holds near $113,000 ahead of Jackson Hole as analysts expect hawkish Powell

The price of bitcoin, ether, and the majority of other cryptocurrencies decreased on Friday ahead of the Jackson Hole speech by Fed Chair Jerome Powell, a significant macroeconomic event. According to one analyst, Powell’s hawkish tone could send markets into risk-off mode, potentially leading to a 30% drop in bitcoin prices.

Bitcoin, ether and the broader crypto market remained steady early Friday morning ahead of U.S. Federal Reserve Chair Jerome Powell’s Jackson Hole speech.
According to The Block’s crypto price page, bitcoin fell 0.74% to $113,018 in the 24 hours leading up to 1:35 a.m. on Friday. Ethereum dropped 0.1% to $4,284.
According to Vincent Liu, CIO of Kronos Research, “Recent data points point to a hawkish Powell at Jackson Hole.” “In light of the most recent data, hawkish remarks may deepen selling, while a dovish surprise could ignite a rally.” If the Fed Chair decides to remain muted and drops no hints about rates at his speech, Liu said the crypto market will still consolidate as traders anxiously wait for a clearer signal.
Powell had previously said that the interest rate decision in September would depend on macroeconomic data, despite continued pressure from President Donald Trump to lower the cost of borrowing.
Wall Street still widely anticipates a Federal Reserve rate cut in September — the CME Group’s FedWatch Tool currently gives a 74.4% chance for a 25 basis point rate cut in September. However, the expectations have been tempered by recent economic data, which presented a mixed picture.
On one hand, the July Consumer Price Index (CPI) came in cooler than expected and initial jobless claims were slightly higher, suggesting that inflationary pressures may be easing.

Currently, Bitcoin holds near $113, indicating the market’s reaction to the upcoming events.

However, other data points indicate that inflation might be more persistent. This is supported by a hotter-than-expected Producer Price Index (PPI) and persistent inflation in core services. It is anticipated that Trump’s tariffs will also contribute to ongoing inflation. In the meeting minutes from July’s meeting, Federal Open Markets Committee members expressed concern over sticky inflation, with some stating there need not be a rate cut in September, according to CNBC.
If Powell’s speech leans hawkish, bitcoin could extend its correction by as much as 30% if markets turn to risk-off positioning, BTC Markets analyst Rachael Lucas said.
Lucas also said that the current pullback is within the normal four-year halving cycle of bitcoin. Lucas made the observation that, “It’s common for prices to soften in September after halving,” and that supply dynamics tighten in November and December. Beyond Jackson Hole, the next price catalysts will remain macro-centered, with upcoming U.S. inflation data, Fed policy meetings and ETF flows to watch out for. Traders will also need to watch for other policy risks, such as Trump’s tariff moves, Lucas added.

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Bitcoin continues to hold steady near $113,000 as traders keep an eye on various factors like inflation data, Fed policy meetings, and ETF flows. Other policy risks, such as potential tariff moves by former President Trump, also remain on the radar. The Block, an independent media outlet providing news, research, and data, is set to acquire a majority stake in Foresight Ventures by November 2023. Foresight Ventures focuses on investments in companies within the crypto space, with Bitget serving as an anchor LP. The Block remains committed to delivering unbiased and timely information about the crypto industry. Financial disclosures are available for review, and all rights are reserved. This content is for informational purposes only and should not be construed as legal, tax, investment, financial, or other advice.