Bitcoin & Ethereum plunge in the face of Powell’s speech – Key thresholds for this weekend

Fed boss Jerome Powell’s speech in Jackson Hole yesterday afternoon had a sharply bearish impact on Bitcoin, with the cryptocurrency retreating to a low of $20,134 on Friday night, the lowest since mid-July, down nearly 8% from the $21,866 peak marked shortly before Powell spoke.

As a result, the Fed boss maintained a hawkish stance, stating in part that “the July inflation decline numbers are welcome, but they are not enough for the Fed to have confidence that inflation will decline.”

Recall that recent U.S. inflation numbers for July had come in lower than expected, prompting the market to consider the Fed slowing the pace of rate hikes.

“We are taking aggressive and timely action to moderate demand to better align with supply, and to keep inflation expectations anchored,” he added, noting, “We will continue our efforts until we are satisfied that the job is done.”

The Fed boss also warned that “restoring price stability will take some time and will require using the central bank’s tools ‘forcefully’.”

In the face of these words, the Dollar jumped, and risk appetite drastically receded, a largely bearish cocktail for Bitcoin and cryptocurrencies in general.

It is worth noting that Ethereum (ETH) suffered a much worse punishment than Bitcoin in the face of Powell’s speech. The second largest cryptocurrency in the market has indeed marked last night a low of $ 1485, down 12.8% from the peak of $ 1703 marked Friday afternoon shortly before Powell’s speech.

Important thresholds to watch for on Bitcoin and Ethereum
From a chart perspective, Bitcoin’s lows yesterday at $20,134 and the major psychological threshold of $20,000 form a key support very close to current prices. A break below this area would be an important bearish signal, which would put the next support area at $18,650/$19,000 in focus. Then, this year’s low at $17,600 will come into play.

On the upside, the first area of resistance that can be spotted on the short-term charts of BTC/USD is $20,800/21,000, then $21,850/22,000. However, taking a step back on the daily chart allows us to estimate that the negative background bias will only be challenged from a return above $25,000.

As far as Ethereum is concerned, the cryptocurrency is currently attempting to recapture the $1500 threshold, which coupled with last night’s lows at $1485 form an immediate support area. Further down, the $1400 threshold and the July 27 low around $1360 will be the next supports.

On the upside, the $1600 and $1700 areas are the next potential resistances to consider if Ethereum starts to rebound.

Bitcoin & Ethereum plunge in the face of Powell’s speech – Key thresholds for this weekend

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