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

After the cryptocurrency’s price drop of less than $20,000., Bitcoin (BTC), analysts wanted to set new price targets for August 27.

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

Targets for a sub-$20,000 BTC price remain in place

Data from TradingView and Cointelegraph Markets Pro showed that BTC/USD hit $19,945 on Bitstamp after the Federal Reserve made hawkish comments.

The pair suffered intraday losses of 9%, while US equities plummeted over concerns about the outlook for inflation policy. This policy appears to be abandoning the “soft landing” narrative.

Restoring price stability is a long-term process that requires us to use our tools forcefully in order to balance demand and supply. Inflation reduction will likely require sustained periods of below-trend growth,” Jerome Powell, Fed Chair, stated in a speech to the annual Jackson Hole economic symposium.

“There will likely be some softening in labor market conditions. Higher interest rates, slower growth and softening labor market conditions will help to lower inflation. However, this will be a downside for households and businesses. These are the unfortunate consequences of reducing inflation. However, a failure to restore price stability will cause far more pain.

Powell added that QT could continue “for some time” and triggered a significant volatility spike across risk assets.

I just spent 10 minutes watching Powell do a lot of nothing.
— Will Clemente (@WClementeIII) August 26, 2022

Cointelegraph reported that U.S. stocks lost $1.25 trillion in one session, more than the entire crypto market.

Bitcoin gained $20,000 in the course of the day and was hovering around $20,200 at the time. However, it is still below its one-month lows.

It was now the question of traders bouncing back, possibly with even greater losses.

Although $BTC fell below what was expected, the idea remains the same. In the first of many updates, Il Capo of Crypto, a popular Twitter account, stated that it was liquidating late shorts first and then went down.

Il Capo of Crypto continued to paint short-term relief targets of $23,000 to $23,500 but, to the downside $19,000 and $16,000 were now in place.

$BTC main idea Resistances: 22500 and 23.000 For a short squeeze, expect a bounce to these levels. This would trap longs once more, as it would be an aggressive move. Support: $19k. If you break below this level, it will go straight to new lows. Main target: $16k pic.twitter.com/wFbVvBmHYO
— il Capo Of Crypto (@CryptoCapo_) August 27, 2022

Others saw the potential to increase BTC accumulation if $20,000 was not used as support.

TraderSZ, a fellow account holder, considered $19,400 a possible bounce zone under such a corrective, with relief running to the weekly close near $23,000 before June’s $17,600 reentered.

For BTC/USD, the trendlines that were important in previous bull markets are now overhead. These include the $21,600 realized price and the MA (200-week) at close to $23,000

“Moving higher resistance at $21,100. Support at $19850, followed by $19,000.” Trading suite Decentrader was added as part of a summary.

DXY awakens last minute to Fed cues

While stocks fell, the familiar face the U.S. Dollar returned to haunt crypto markets.

Related: CME Bitcoin futures record price in’very bearish’ sentiment

After initially experiencing heavy downside, the U.S. Dollar Index (DXY) rebounded and now stands within striking distance of its twenty-year highs.

DXY was just below 108.9 at the end of August 26, an increase of less than 107.6 in a matter hours.

U.S. dollar index (DXY), 1-hour candle chart Source: TradingView

Analyst Kevin Svenson summarized: “FED staying on course means $DXY keeps its trend which means assets tend down more,”

Investor and entrepreneur Danny Baldus Strauss pointed out to his Twitter followers the inverse correlation between DXY, BTC as an ongoing top- and bottom indicator.

“If you are accumulating Bitcoin during this bear, pay attention to $DXY. He noted that all major bottoms of $BTC coincide with local tops of $DXY,” along with a chart from Stockmoney Lizards.

U.S. dollar index, DXY vs. Bitcoin/USD annotated graph. Source: Danny Baldus-Strauss/ Twittercom. You should do your research before making any investment or trading decision.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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