Bitcoin and Ether stabilize ahead of Fed symposium

NEW YORK, NEW YORK, USA, Aug. 25, 2022 / — ALT 5 Sigma Inc., a global fintech that provides next-generation blockchain-powered technologies for tokenization, trading, clearing, Settlement, Payment and Custody of Digital Data Instruments publishes its Digital Assets Morning Call.

• Bitcoin and Ether consolidate after previous week’s bruising

• Markets set for hawkish messages at Fed symposium

• In this case, it could allow for a more constructive exchange of crypto token prices

On the cards

Bitcoin and Ether continue to consolidate losses from a week ago as markets wait for potential catalysts, especially on the macro front. Bitcoin edged above the August 20 low of $20,760 and since then it has mostly been testing and maintaining the support set by the uptrend taken from the June 18 low. Ether rose to $1,700 today from the August 20 low of $1,523. Over the past week, it has tested but mostly held the support established by the 50-day moving average, which currently stands at $1,580. (The source of all price and chart data is

Focus on the Fed

The focus is squarely on central bank policy as the Kansas City Federal Reserve’s annual economic symposium in Jackson Hole, Wyoming kicks off today. The most anticipated event will be Fed Chairman Powell’s remarks scheduled for Friday morning. But the event also includes a number of other speakers from the Federal Reserve as well as central bankers from around the world. Therefore, there may well be a variety of messages coming out of the meetings.

Hawk Setup

The market pattern prior to this event is important in gauging the potential market reaction. After Fed Chairman Powell sounded a bit less hawkish at the July FOMC meeting, subsequent data and other Fed commentary turned more hawkish. As a result, US interest rates have risen significantly, with the 2-year Treasury yield rising more than 50 basis points from its late-July low to stand at 3.39% currently, leaving it just below the cyclical peak of 3.45% reached in June. In short, the market seems prepared for a more hawkish message from Fed officials rather than one that suggests a near-term “pause” in the tightening cycle.

From our perspective, the more hawkish sentiments evident in Fed commentary and economic data in recent weeks is one of the drivers behind the recent decline in crypto token prices. This year’s Fed tightening and associated decline in central bank liquidity has put pressure on risk and financial assets in general, including crypto assets. In this regard, the pullback of bitcoin and ether over the past week is consistent with that of other risky assets such as the Nasdaq Composite Index.

find the balance

Against this backdrop, it would appear that the bar for Fed Chairman Powell to be even more hawkish than the current market setup would be quite high. Powell should certainly reiterate the Fed’s determination to bring inflation back to the 2% target and, with that, point out that more tightening is ahead. But he can also balance this with the idea that the Fed has tightened a lot to date and that it may take time for the full effects of these rate hikes (as well as the simultaneous reduction in the balance sheet) to take place. more fully felt in terms of lower demand and, ultimately, lower inflation.

If indeed that is the takeaway from Powell’s speech on Friday (along with the collective messages of other central bank officials), there may well be an opportunity for crypto token prices to continue their recent consolidation and stabilization models. A more bullish turn to the meeting could see risk assets recover recently lost ground, a condition that would be more supportive for crypto token prices.

Robert Lynch
Research and Strategy Manager
ALT 5 Sigma Inc.
[email protected]


ALT 5 Sigma is a global fintech that provides next-generation blockchain-powered technologies for trading, clearing, settlement, payment and safe custody of digital instruments. ALT 5 was founded by specialists in the financial sector out of the need to provide the digital asset economy with security, accessibility, transparency and compliance. ALT 5 offers its customers the ability to buy, sell and hold digital assets in a safe and secure environment deployed with financial industry best practices. ALT 5 Sigma’s products and services are available for banks, brokers, funds, family offices, professional traders, retail traders, digital asset exchanges, digital asset brokers, developers blockchain companies and financial information providers. ALT 5’s digital asset custodian services are secured by Fireblocks.

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