The price of Bitcoin has slipped by 1.5% in the last 24 hours, dropping below $26,100. This decline follows a recent selloff that broke a period of historically low volatility and brought Bitcoin to its lowest levels since mid-June. Analysts are closely monitoring Fed Chair Powell’s upcoming speech at the Jackson Hole Economic Symposium, as the outlook for interest rates remains a crucial factor for risk-sensitive assets like cryptocurrencies.
The Federal Reserve’s efforts to control inflation by increasing interest rates have impacted both stocks and cryptocurrencies throughout 2022. Bitcoin, in particular, is affected by elevated rates because investors are less inclined to take risks when they can earn higher rates on cash or risk-free Treasuries. The market is divided between those who anticipate the Fed keeping interest rates high for a longer duration due to strong economic indicators and inflation concerns, and those who fear that the Fed’s inability to reign in inflation without causing an economic downturn may lead to a “hard landing.”
Investors are closely watching Powell’s speech at the Jackson Hole conference to gain insights into the future trajectory of the Fed’s policies. Despite market tensions and caution, the price of Bitcoin is expected to struggle in establishing a clear direction towards the next Fed policy meeting in September. Other cryptocurrencies such as Ether, Cardano, Polygon, Dogecoin, and Shiba Inu have also experienced declines in response to the overall market movements and uncertainties surrounding interest rates.