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Following
BTC Bitcoin (BTC) fluctuated after Wall Street opened on Friday, as markets responded to Federal Reserve Chairman Kevin Warsh's remarks on future monetary policy.
Highlights:
Bitcoin initially fell during Federal Reserve Chairman Kevin Walsh's keynote speech at Jackson Hole, and then hovered around $79,500.
Walsh said that despite the recent decline in PCE and CPI data, he did not see a shift in inflation trends.
Analysts pointed out that whether the Bitcoin price can remain above US$83,000 depends on the behavior of Bitcoin derivatives traders.
Walsh: Inflation trends have not shown a "substantial improvement"
TradingView data shows that in a volatile trading environment, BTC/USD fell to US$78,442 on Bitstamp, a decline of about 1% as of the time of publication.
In his first keynote speech at the Jackson Hole Annual Symposium, Washi expressed caution about inflation and promised to work towards achieving the Fed's 2% target. The Fed chairman further reiterated his previous commitment to reduce the scope of future policy hints the Fed provides to markets, avoid forward-looking guidance entirely, and stated that this practice would not be reintroduced in the future.
"Forward-looking guidance was a routine practice that my colleagues and I adopted during the global financial crisis. At the time, it was necessary and we introduced it with great fanfare. But like the legacy of other crises, I think this practice has exceeded its due period." he said.
Walsh also denied recent lower-than-expected inflation data in the consumer price index (CPI) and personal consumption expenditure (PCE) index, arguing that this was not a sign that a downward trend was taking shape. "These broad inflation measures have all fallen significantly from their highs a few years ago, but progress has been more modest in the past few years. Although this summer's PCE and CPI readings were better than expected, that doesn't tell me that underlying trends have improved substantially." He continued.
In Walsh's speech, the U.S. stock market did not fall, and he also gave positive comments on business performance and growth in the field of artificial intelligence. As of the time of publication, the S & P 500 index and the technology-dominated Nasdaq Composite Index both rose about 0.5%.
Analysis highlights the role of derivatives in Bitcoin's further rise
As a result, Bitcoin's price trend continues to fluctuate around the US$80,000 mark, with its intraday trading range narrow before the monthly close in August.
Previously, there were reports that expected the monthly close. Analysts pointed out that BTC/USD needs to break through a downward sloping trend line and hold the 50-week exponential moving average of approximately US$77,250 in order to maintain the upward trend.
Related: CryptoQuant CEO: Bitcoin bear market is "over", price indicators return to 2023 recovery pattern
On-chain data also shows that there is a dense area of resistance between the current spot price and US$86,000, which has slowed the upward trend.
Trading firm QCP Capital commented in its latest analysis that even if prices break through higher, the derivatives market needs to provide necessary support by controlling the growth of capital rates and open interest contracts.
"If prices continue to rise, while funding rates remain restrained and open interest contracts are gradually rebuilt, this will indicate a different market structure and a situation where leverage rises rapidly with prices." QCP Capital wrote, adding:
"Therefore, the key difference is not whether BTC is trading above or below US$83.3k, but whether subsequent price movements continue to be supported by spot participation or are increasingly driven by leveraged positions."
According to CoinGlass data, as of the time of publication, BTC/USD has risen 26.35% so far this month, setting the best August performance since 2017.
