- Federal Reserve Chairman Jerome Powell expected to adopt a dovish stance in the Jackson Hole meeting.
- BTC/USD exchange rate reclaims pre-May crash price levels at $50,000.
- Bullish momentum to continue further amid the US dollar’s depreciation.
JAIPUR (Coinchapter.com) – Bitcoin prices topped $50,000 on Monday. The top cryptocurrency’s rally came amid Bullish speculators anticipating a dovish outcome of the Fed’s next Jackson Hole meeting.
The benchmark cryptocurrency resumed its uptrend after breaking out of a sideways trading bias on Sunday. Consequentially, the BTC/USD exchange rate ticked up to attain a sessional high of $50,532 after rising 5% from the local low at $48,185.
A fresh bout of profit-taking did cause Bitcoin prices to slip to $49,300, but the overall trend remained bullish. In contrast, the US dollar maintained a steady downtrend ahead of the crucial Fed meeting.
Related: Why do the US dollar and Bitcoin keep gaining global momentum
Jackson Hole
Sponsored by the Federal Reserve Bank of Kansas City since 1978, the Jackson Hole Economic Symposium is an annual symposium held in Jackson Hole, Wyoming, since 1981. The gathering attracts central bank officials, leading financial market players, and finance ministers worldwide. The symposium will be a strictly digital event this year.
Minutes from July’s Federal Open Market Committee (FOMC) meeting suggested necessary action on plugging 2020’s economic stimulus. Several FOMC members seemed confident about rolling back the monthly purchase of $120 billion worth of treasury and mortgage-backed securities earlier this year due to the rising labor market and general economic growth.
Related: Bitcoin week ahead Ep15: Overvaluation risks persist ahead of tapering debate
However, that sentiment is expected to be sidelined amid a significant rise in delta variant cases. As a result, market participants and day traders even wagered on the Fed waiting till November or December to activate the gears on near-zero interest rates.
Bitcoin Technical Setup
Bitcoin’s ascent above $50,000 attracted bears who actively sold the top, pushing prices down to $49,000. The sell-off followed an uptick in the relative strength index (RSI) to 68, generally considered an overbought level.
The Fibonacci retracement plot provides insights into the price levels to watch in a Bitcoin market downtrend scenario. Continuing the ongoing selling action could see BTC/USD exchange rates heading to $47,293 (coincides with the 50-day moving average (50-day MA) wave. Breaking below the said price would expose Bitcoin to risks of dropping to $46,000.
However, with the US dollar index (USD’s strength against major fiat currencies) following the downward path, bitcoin’s long-term bullish trend will remain undisturbed. Thus, the correction would be a much-needed one before the next leg up.
