All Eyes on Powell’s Speech. Rate Cut Announcement Today?
Double Bottom in Play. A Bullish Pattern With High Chances of Success
After printing yet another All-Time High (ATH) this year, Bitcoin retreated sharply into the $112K area and is now trying to find its footing again. The level at $112K provided strong support in the past, and on Wednesday, Bitcoin showed the level is still important, posting the first notably bullish day since reaching the $124K ATH.
The Federal Reserve Chair Jerome Powell is set to deliver a speech at the Jackson Hole Symposium later today. This may be the catalyst needed by BTC and the crypto market in general to start a substantial recovery. The interest rate has been a hot topic lately, and Powell’s speech is likely to add extra volatility.
To Cut or Not to Cut? This Is the Question.
A rate cut was almost a certainty a few days ago, but the U.S. wholesale prices (Producer Price Index – PPI) released last week threw a wrench in those plans. Trump’s tariffs made their presence felt and generated a much higher than expected PPI. This, in turn, diminished the probability of a rate cut, bringing it to 81% at the time of writing, down from 98% before the PPI release.
The markets are largely pricing in a hawkish Powell, who could hint at no cuts in September. But if he points towards a rate cut, this would be amazing news for Bitcoin and altcoins. If the current selloff is already priced in, then a “no-cut” scenario may not have an explosive impact: those who wanted to sell already did so. But on the other hand, if Powell suggests that a cut is next, then the bullish impact would be huge. Of course, there is also the possibility that he avoids the subject altogether, but the chances of that happening are relatively low.
President Trump has been very vocal, pushing on many occasions for a rate cut and calling Powell “Too Late Powell” numerous times. Today, we will finally see if Powell finally gives in and announces a rate cut.
Chart Analysis – BTC/USD
In August, Bitcoin touched $112K support twice, effectively creating a double bottom pattern. The pattern shows strong support and buying pressure around the level. Usually, it results in a move higher. However, depending on Jerome Powell’s stance and speech, the price may cut through the support at $112K, thus invalidating the pattern.
If the pair starts a recovery, the next resistance is located around $116,000 – $116,500, which is the lower boundary of the range that trapped Bitcoin from mid-July until late-July, before the most recent ATH was reached. If the support at $112K is broken, the next support will be located at the bullish trend line seen on the chart below, followed by $107K.
