Bitcoin price briefly loses $20,000 on Powell’s ‘a bunch of nothing’ speech

bitcoin (BTC) analysts were keen to set new price targets on August 27 after the biggest cryptocurrency briefly fell below $20,000.

BTC/USD 1 hour candle chart (Bitstamp). Source: Trading View

Price targets below $20,000 BTC remain in place

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching $19,945 on Bitstamp the following night warmongering comments of the United States Federal Reserve.

Intraday losses for the pair approached 9% and US equities tumbled on the outlook for inflation policy, which seeks to increasingly let go of the “soft landing” narrative.

“Restoring price stability will take time and will require forceful use of our tools to rebalance supply and demand. Reducing inflation will likely require an extended period of below-trend growth,” he said. Fed Chairman Jerome Powell in a statement. speech at the annual economic symposium in Jackson Hole.

“Furthermore, there will most likely be some easing of labor market conditions. While higher interest rates, slower growth and weaker labor market conditions will bring inflation down, they Households and businesses will also suffer.These are the unfortunate costs of reducing inflation.But a failure to restore price stability would cause far greater pain.

Adding that quantitative tightening, known as QT, could continue “for some time,” Powell triggered a major downward volatility spike in risky assets.

Like Cointelegraph reportedUS stocks lost a total of $1.25 trillion in a single session, more than the entire crypto market capitalization.

Bitcoin managed to regain $20,000 on the day and was hovering around $20,200 at the time of writing, but still close to 1-month lows.

For traders, it was now a relief bounce followed – potentially – by even deeper losses.

“$BTC fell lower than expected, but the idea is still the same. First to liquidate lagging shorts, then down,” Crypto’s popular Il Capo Twitter account Told subscribers in the first of several updates for the day.

Continuing, Crypto’s Il Capo painted short-term relief targets between $23,000 and $23,500, but on the downside $19,000 and $16,000 were now in play.

Others have observed the potential for increasing The BTC accumulation should be breached again by $20,000 as support.

TraderSZ Account Companion considered $19,400 a potential bounce zone below such a correction, with current relief at the weekly open near $23,000 before June’s $17,600 re-enters the chart.

Meanwhile, the major trendlines seen in earlier bull markets were now back above the head for BTC/USD. These included the realized price at $21,600 and the 200-week moving average (MA) near $23,000.

“Moving resistance higher at $21,100. Support at $19,850 followed by $19,200”, Decentrader trading suite added as part of a summary of the current scenario.

DXY wakes up at the last minute on Fed signals

As stocks tumbled, the familiar face of the US Dollar returned to haunt the crypto markets.

Related: CME Bitcoin Futures See Record Discount Amid ‘Very Bearish Sentiment’

The US Dollar Index (DXY), initially in sharp decline, rebounded to levels that again put it in a striking range of 20-year highs.

At the end of August 26, DXY was hovering around just under 108.9, down from a low of 107.6 within hours.

US Dollar Index (DXY) 1 hour candle chart. Source: Trading View

“The FED staying the course means $DXY maintaining its trend, which means the assets tend to fall more,” analyst Kevin Svenson abstract.

Investor and entrepreneur Danny Baldus-Strauss meanwhile pointed out to Twitter followers the inverse correlation between DXY and BTC as a continuous upper and lower indicator.

“If you’re accumulating Bitcoin in this bear, keep an eye out for $DXY. All major lows in $BTC have coincided with local highs in $DXY,” he said. Noted next to a chart from the Stockmoney Lizards trading platform.

US Dollar Index (DXY) versus BTC/USD annotated chart. Source: Danny Baldus-Strauss/Twitter

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