Bitcoin (BTC) surged $27,000 after the Wall Street open on May 19 as the chairman of the United States Federal Reserve made policy comments.
BTC Price Volatility Returns as Powell Speaks
Data from Cointelegraph Markets Pro and TradingView followed the BTC/USD pair as it attempted to regain the focal level in its short-term trading range.
All eyes were on Fed Chairman Jerome Powell speaking at the Thomas Laubach Research Conference in Washington, DC.
Market jitters had returned the day before, as other Fed officials, coupled with unemployment data, had raised expectations that interest rate hikes would continue.
“While financial stability tools have helped calm conditions in the banking sector, developments in that sector, on the other hand, are helping to tighten credit conditions and are likely to weigh on economic growth, hiring and inflation.”said.
“So as a result, our policy rate may not need to increase as much as it otherwise would to achieve our goals. Of course, the extent of that is very uncertain.”
Powell added that the markets’ divergence from the Federal Reserve’s rate hike expectations “appears to simply reflect a different forecast, in which inflation falls much faster” than officials themselves believe.
Therefore, bitcoin was especially sensitive to suggestions that rate hikes could end sooner or later, with the conference underway as of this writing.
Immediately earlier, a snapshot of the liquidity on the Binance order book for the BTC/USD pair uploaded to Twitter by monitoring resource Material Indicators showed a lack of significant support above $26,000.
Meanwhile, demand liquidity was slowly accumulating in a zone closer to the spot price, around $27,300.
Here’s an intraday look at the #Bitcoin order book on @binance just before #EDF chair #JPow speaks.
His words will move #TradFi and #Crypto markets. pic.twitter.com/ezyQMyE1bm
— Material Indicators (@MI_Algos) May 19, 2023
Here’s an intraday look at the #Bitcoin order book on @binance just before the #FedChair #JPow speaks.
His words will move the #TradFi and #Crypto markets.
“This year is crucial to see how the next ones are shaping up in the economy,” reacted meanwhile popular Crypto trader Tony, referring to Powell on Fed policy.
Markets raise bets on rate freeze
While Bitcoin was showing signs of volatility, the strength of the traditionally inversely correlated US dollar was showing some stress.
The US Dollar Index (DXY) was down 0.4% on the day, briefly dipping to 103 to erase the day’s gains.
The latest data from CME Group’s FedWatch Tool showed a rapid shift in market sentiment on a pause in rate hikes in June.
After starting the day with a 62% chance of a break, that figure rose to 80% within the first half hour of Powell’s appearance.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.