All eyes are on the Fed’s Jackson Hole meeting ahead this week as Fed Chair Jerome Powell is likely to announce interest rate hikes.
On Wednesday, August 23, Bitcoin and the broader crypto market staged a recovery with the BTC price shooting past $26,500. Yesterday’s bounce back could be a breather to investors as they have been grappling with market uncertainties. All eyes will be on the Federal Reserve’s annual meeting in Jackson Hole, Wyoming, on Friday.
Bitcoin and Broader Crypto Market
Bitcoin surged over 2% to reach $26,517.09. The cryptocurrency has maintained its position around the $26,000 mark after a sudden drop below it last week, marking its most significant weekly decline since May. Ether also experienced a rise of over 3%, trading at $1,684.20.
On-chain data also shows that Bitcoin whales have resumed buying after dumping heavily last week. There seems to be some bottom fishing by the whales. Over the past week, the BTC whales have accumulated over $300 million of Bitcoins, according to data from Santiment.
🐳🦈 #Bitcoin jumped back as high as $26.8K Wednesday as key whale & shark addresses are now collectively adding to their stacks once again. There are currently 156,660 wallets holding 10 to 10,000 $BTC, and they have accumulated $308.6M since August 17th. https://t.co/6vuJpHRTvD pic.twitter.com/vuNgEER2fZ
— Santiment (@santimentfeed) August 23, 2023
Coming to altcoins, Binance Coin, the fourth-largest cryptocurrency by market capitalization, achieved a 4% gain. Similarly, tokens connected to competitors of Ethereum also showed positive movement – Solana’s coin soared by 6%, Cardano’s gained 5.5%, and Polygon’s increased by 4%.
Interestingly, the uptick in the crypto market aligned with gains observed in major stock indexes. Crypto assets experienced a more pronounced surge around noon ET, although the exact cause behind this rapid movement remains unclear. Speaking to CNBC, Callie Cox, analyst at investing firm eToro said:
“You’re probably going to see some wild moves up and down as bitcoin tries to march back to $30,000. Add in summer trading volumes, and you have a recipe for day-to-day volatility. Bitcoin prices have been more resilient today on hopes for lower rates, and a few hours of stable trading could have been enough to bring buyers back in.”
Crypto and Equity: Hand In Hand?
Yesterday’s surge in the crypto space came along with a healthy uptick on Wall Street. Dow Jones (INDEXDJX: .DJI) ended Wednesday’s trading 0.54% up at 34,472.98.
Recently, the market has concerns that Fed Chair Jerome Powell might adopt a more hawkish stance regarding potential rate hikes in his upcoming speech at the central bank’s Jackson Hole meeting this week. Some speculate that the current sell-off could be a result of the “sell-the-rumor, buy-the-news” phenomenon.
Crypto has faced challenges due to reduced liquidity and limited trading volumes since spring, amplifying both upward and downward price swings. This effect has been particularly notable during the typically quieter month of August. Sam Callahan, lead analyst at Swan Bitcoin said:
“The correlation between equity indices and bitcoin has declined to near zero in 2023. Bitcoin’s price appears to be bouncing after a sharp sell off last week that was exacerbated by over $2.7 billion worth of liquidations of leveraged positions.”
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