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Bitcoin sell-off at $11.8k before the Jackson symposium

Photo of: Dennis Ramos
by Dennis Ramos

Bitcoin, reckoned as the most popular and oldest cryptocurrency, has its moment of weakness. The Jackson Hole meeting to be conducted by the end of the week seems to be the reason behind the fall of 1.5% in the early London trading session after setting an intraday top at $11,823 a day before. Traders entered the markets but are waiting for the biggies in the monetary circuits to throw light on the global economy’s health. 

The Jackson Hole Economic Symposium

For those unaware, the Jackson Hole Economic Symposium is a customary annual symposium which is sponsored by the Federal reserve bank of Kansas City since 1978. The symposium focuses on important issues that face world economies and how economies grappling with worst fears can come off the lurch. Every year the meets are held in Jackson Hole, Wyo, but this year the meet is a virtual one. The meeting is inundated with prominent central bankers, luminaries from the academic world and ministers, and dominant financial players around the world. The remarks and proceedings at the sym[posium have an overall impact on global financial markets. 

What does it mean for Bitcoin?

The US Federal Reserve’s Chairman Jerome Powell will be the chief speaker at the virtual meet. He intends to provide clarity on how the economic slowdown can be reversed. Earlier in the July 2020 meeting, the Fed had indicated that their stimulus program might not get expanded in the near future. It rather focussed on a long-term strategy leading that it might tolerate higher inflation before support is withdrawn. Obviously people venturing into Bitcoin as a safe haven increased but with short term uncertainty in the picture the upside reversed. Global equity markets rallied which also shifted the focus from Bitcoins. S&P 500 on Tuesday closed 1% higher compared to its peers, Dow Jones and the Nasdaq composite. Below are trends observed of Bitcoin against US dollar index, Dow Jones, Nasdaq, and the S&P 500.

Source: Trading view

Technical outlook

Bitcoin price began with an upside correction from the $11,350 support against the dollar. While BTC is presently declining it can resurrect as long as it stays above $11,650 or even $100 less. What needs to be noted is that BTC formed a high close to $11,825 and is presently correcting lower. The trends also show a break below a major bullish trend line with support near $11,710 on the hourly chart of BTC/USD pair. If the pair intends to go towards $12,000 it needs to stay afloat and above $11,650 or $11,550.

Source: Trading view

BTC gains were registered when the Trump administration announced the fast-tracking of the COVID vaccine development at Oxford University. The upside was also the result of the phase-one trade deal between the US and China when the two superpowers came over their differences. Avid BTC traders now await the speech on Thursday. If the speech indicates towards easing monetary stances like near-zero interest rates and infinite bond-buying, it will leave the dollar in a weaker position. This would surely help Bitcoin stimulate its growth further.