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Bitcoin recovered above support at $67,000 after falling as much as 5% on Tuesday. Federal Reserve Chairman Jerome Powell delivers his customary speech Wednesday following the FOMC meeting. Will he be dovish, which would fuel a potential rebound, or will persistent inflation make him more hawkish and curb risk assets?
Powell's speech
At 2 PM ET, Federal Reserve Chairman Jerome Powell will once again take the podium to deliver his customary speech after the Federal Open Market Committee (FOMC) meeting.
The typical game is played with market participants analyzing everything Powell says, how he says it, and the nuances of it. The direction and flow of billions, if not trillions of dollars will depend on this speech.
With Wednesday's rate cut or increase completely ruled out by market forecasts, it remains for Powell to keep quiet and set a dovish or hawkish tone for the markets to accept and be legitimately influenced.
Another influential finding coming out of these meetings is the Fed 'dot plot'. It gives Fed officials expectations about the number, size and timing of cuts that could be made in the future.
It is through this mud that risk assets must find their way. Bitcoin suffered a slight decline on Tuesday, but given that the inflation data came in without any specification, the decline did not faze Apple Cart too much.
Bitcoin bounces from support
Source: TradingView
The $BTC price fell back inside the support zone and rebounded at $66,000, as seen in the chart above. Additionally, the rising trend line provided support, which led to today's small bounce.
Dove or hawk?
If Chairman Powell's speech today is interpreted by the market as 'non-poetic', Bitcoin could rise once again and test the downward bullish trend line around the $70,000 level.
On the other hand, if Powell is trying to calm the markets due to inflation fears and his speech is particularly 'hawkish', $BTC may lose support and fall to lower levels. This scenario is the least likely of the two, but it's worth being prepared for.
Disclaimer: This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.
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