Unfavorable tank. The cryptocurrency market has been shaken in the past 24 hours, with massive liquidations on positions long Takes on Ethereum (ETH) and Bitcoin (BTC). This correction occurs while hopes of a drop in interest rates by the Federal Reserve (Fed) in September fading, and investors are waiting for an anxiety about Jackson Hole’s speech of Jackson Hole this Friday.
- The cryptocurrency market was shaken by massive liquidations, mainly on Ethereum and Bitcoin, following the weakening of the hopes of a drop in interest rates by the Fed.
- While Bitcoin and Ethereum have dropped to their lowest levels for weeks, the imminent speech from Jerome Powell to Jackson Hole is expected with an impatience mixed with anxiety by investors.
Massive liquidations and increased volatility on Bitcoin and Ethereum
According to Nick Forster, founder of Derive.xyzquoted by the specialized press, this liquidation represents a “Rejection of short -term positions rather than structural change”. Indeed, out of the liquidated $ 270 million, 170 millions concerned theETH et 104 millions the BTCwith 95 % of these liquidations on positions long. The implicit volatility (iv) of ETH over 7 days has also increased, from 68 % to 73 %, indicating that traders anticipate short -term turbulence.
The probability of a “No drop” Fed rates in September also dropped from 12 % to 26 % according to Polymarket. This re -evaluation led to a drop in bitcoin to 115,036 dollars, its lowest level for almost two weeks, while theEthereum was negotiated at $ 4,235. THE XRPon the other hand, remained relatively stable at 3.02 dollars.
What to expect from Jerome Powell’s speech?
The market is now awaiting Jackson Hole’s speech from Jackson Hole. According to Augustine Fan, insight manager at Signalplus, “The hopes of a drop of 50 base points at the September meeting were quickly destroyed, with approximately 90 % of a single drop being already integrated”. She added that “The emphasis will be put on Jackson Hole later this week, but we do not really expect good surprises given the inflationary context”.
This perspective has inevitably led rather negative projections with 21% probability that the BTC reached $ 100,000 before the end of September and 60% that theETH Correct $ 4,000 by the end of the month.
Again, the short -term crypto market remains extremely correlated with the American equity market and risky assets, and Bitcoin does not yet fulfill its role of reserve of value. The speech of Jerome Powell to Jackson Hole will therefore be crucial to determine the management of the financial markets in the coming weeks and the prices of the cryptos may remain stormy while waiting for the end of the weekend. Hang your belts!