As Federal Reserve (Fed) Chairman Jerome Powell prepares to return to Jackson Hole this Friday, the Bitcoin (BTC) market is experiencing a sense of anticipation due to the similarities in current price action compared to the prior period. to the last. year speech.
The main moving averages have been tested and lost over the past two weeks, followed by a period of consolidation, reminiscent of previous events.
However, it is important to note that these agreements do not guarantee a repeat of the past as market conditions and Powell’s position have evolved since then.
Déjà Vu in the Bitcoin market?
According to to Keith Alan, co-founder of analytics and crypto research firm Material Indicator, last year, in the two weeks leading up to Powell’s speech, BTC’s price broke through crucial technical support levels, represented by the 21-day, 50- daily, 100-day, and 200-week moving averages (MA).
Then followed a period of consolidation, followed by a significant drop in prices in response to Powell’s aggressive tone during the speech. Alan stated:
Remember when Fed Chairman Powell spoke from Jackson Hole last year and his aggressive tone caused a 29% BTC dump that took five months to recover?
Notably, the recent price action in the Bitcoin market shows similarities to last year’s pattern. For the past two weeks, Bitcoin has tested and lost the same key moving averages, and is currently undergoing a phase of consolidation, mirroring the events leading up to Powell’s previous speech.
Keith Alan emphasizes that there have been notable changes since last year’s Jackson Hole event. Core inflation has slowed and Powell’s approach to communications has become more measured.
It is uncertain whether Powell will take an aggressive or lenient stance in his forthcoming speech, making it challenging to predict the market’s reaction with certainty. What is clear, however, is that the market is ready for an important move.
In addition, Alan suggests that the formation of a lower price level increases the likelihood of an extension of the existing downtrend. Market participants should be prepared for the possibility of testing support levels further.
As the Bitcoin market awaits Powell’s speech, market sentiment remains dynamic. Traders and investors anticipate possible market moving signals from the event.
As the date of Jerome Powell’s return to Jackson Hole approaches, Bitcoin has posted a remarkable 2.1% recovery over the past 24 hours, marking a positive upward move that takes it closer to the $27,000 threshold.
However, it is critical to note that if the outcome of Jerome Powell’s speech on Friday proves favorable to crypto investors and propels Bitcoin’s price to higher levels, the cryptocurrency could face a significant obstacle in the form of from its 200-day moving average which stands at $27,200. .
Featured image from iStock, chart from TradingView.com