Bitcoin, ether and the broader crypto market remained steady early Friday morning ahead of U.S. Federal Reserve Chair Jerome Powell’s Jackson Hole speech.
According to The Block’s crypto price page, bitcoin fell 0.74% to $113,018 in the 24 hours leading up to 1:35 a.m. on Friday. Ethereum dropped 0.1% to $4,284.
“Consensus points to a hawkish Powell at Jackson Hole due to recent data points,” said Kronos Research CIO Vincent Liu. “A dovish surprise could spark a rally, while hawkish remarks may deepen selling amid recent data.”
If the Fed Chair decides to remain muted and drops no hints about rates at his speech, Liu said the crypto market will still consolidate as traders anxiously wait for a clearer signal.
Powell had previously said that the interest rate decision in September would depend on macroeconomic data, despite continued pressure from President Donald Trump to lower the cost of borrowing.
Wall Street still widely anticipates a Federal Reserve rate cut in September — the CME Group’s FedWatch Tool currently gives a 74.4% chance for a 25 basis point rate cut in September. However, the expectations have been tempered by recent economic data, which presented a mixed picture.
On one hand, the July Consumer Price Index (CPI) came in cooler than expected and initial jobless claims were slightly higher, suggesting that inflationary pressures may be easing.
However, other data points suggest inflation could be stickier. This is supported by a hotter-than-expected Producer Price Index (PPI) and persistent inflation in core services. Trump tariffs are also expected to contribute to ongoing inflation.
In the meeting minutes from July’s meeting, Federal Open Markets Committee members expressed concern over sticky inflation, with some stating there need not be a rate cut in September, according to CNBC.
If Powell’s speech leans hawkish, bitcoin could extend its correction by as much as 30% if markets turn to risk-off positioning, BTC Markets analyst Rachael Lucas said.
Meanwhile, Lucas also pointed out that the current pullback fits within bitcoin’s natural four-year halving cycle.
“It’s common for prices to soften in September after halving, before picking up into November and December as supply dynamics tighten,” Lucas noted.
Beyond Jackson Hole, the next price catalysts will remain macro-centered, with upcoming U.S. inflation data, Fed policy meetings and ETF flows to watch out for. Traders will also need to watch for other policy risks, such as Trump’s tariff moves, Lucas added.
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