First Mover Americas: Bitcoin Gains Stall at $22K as Markets Await Powell at Jackson Hole

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Cryptocurrencies are showing gains on Thursday, with bitcoin (BTC) higher by nearly 2% and ether (ETH) advancing 3%. Stock futures were also up as investors await Friday’s appearance by Federal Reserve Chairman Jerome Powell at the annual Jackson Hole conference. European stock and bond markets are also modestly in the green, as is the euro, though it remains below parity with the U.S. dollar.

Despite the recent advance, bitcoin appears to be struggling to break above the $22,000 mark. The cryptocurrency has mostly been stuck in a range of $21,300-$21,800 of late after having dropped to as low as $20,000 last week.

“There may still be some nerves after last week’s plunge, with $20,000 looking particularly vulnerable once more,” said Craig Erlam, senior market analyst at OANDA. “A break below could quickly see sentiment turn against crypto after an encouraging recovery since mid-June.

Looking at other altcoins, Ethereum classic (ETC) was trading up 10% on the day and memecoin Shiba Inu was up 10%. Cosmo’s ATOM was up 9%.

Earlier Thursday, crypto exchange Coinbase introduced a liquid staking token ahead of Ethereum’s Merge. The Coinbase Wrapped Staked ETH (cbETH) will have several uses, including selling and transferring staked ETH as well as for collateral in DeFi protocols.

The Coinbase move comes as the Ethereum Foundation disclosed on Wednesday the official parameters for the long-awaited Merge blockchain upgrade to a proof-of-stake consensus mechanism. The Bellatrix upgrade, which has begun its final countdown, is set to activate on Sept. 6. The Merge itself will be completed at some point from Sept. 10-20.

In other news, Bitcoin Depot, the world’s largest operator of crypto ATMs, plans to go public with a listing on Nasdaq by merging with special purpose acquisition company (SPAC) GSR II Meteora at an estimated valuation of $885 million, according to a statement shared with CoinDesk.

Bitcoin’s Pre-Jackson Hole Decline Leaves Room for ‘Buy The Fact’ Bounce

By Omkar Godbole

Financial markets are more interested in what the future holds than what happened in the past or what is happening right now. The forward-looking nature means traders try to predict the impact of upcoming events and discount the same in advance, setting the stage for more volatility after the event.

That’s what crypto and equity markets seem to be doing ahead of the U.S. Federal Reserve Chairman Jerome Powell’s scheduled speech on Friday at the Jackson Hole Symposium. Risk assets have come under pressure while the dollar and bond yields have rallied, pricing very hawkish or anti-inflation and pro-monetary tightening comments. That has left the door open for a “buy the fact” bounce in risk assets subject to Powell meeting expectations or sounding less hawkish than expected.

Bitcoin (BTC), the leading cryptocurrency by market value, has dropped by 13% since reaching a high of $25,000 on Aug. 15, CoinDesk data shows. Wall Street’s tech index Nasdaq has lost nearly 6% since Aug. 15, while the dollar index, which gauges the greenback’s exchange rate against major fiat currencies, has jumped 2.5%. The U.S. 10-year bond yield has increased by nearly 30 basis points.

“The market has 72% chance of a 75 basis point rate hike, the third in row, priced in. My scenario that I have been writing about and trading is bullish dollar ahead of Powell, and buy the rumor sell the fact,” Marc Chandler, chief market strategist at Bannockburn Global Forex and the author of the book “Making Sense of the Dollar,” said. “So as soon as Powell begins talking, look for the dollar to set back.”

“I think no matter what Powell says or the Fed does, the market insists on reading/hearing him dovish,” Chandler said.

Bitcoin tends to move in the opposite direction to the dollar and weakness in the greenback after Powell’s speech could power a buy-the-fact bounce in the cryptocurrency.

Read the full story here.

Bitcoin Forms a Bear Flag

By Omkar Godbole