Bitcoin Retreats to $26K as Markets Await Jerome Powell's Address at Jackson Hole

The annual Jackson Hole Symposium hosted by the Kansas City Federal Reserve is currently taking place, and Powell is scheduled to give his main speech on Friday morning.

On Thursday, the price of Bitcoin (BTC) is moving towards the $26,000 mark again, undoing most of the gains it achieved yesterday, alongside drops in traditional markets. At the time of reporting, BTC was valued at $26,042, marking a decrease of approximately 2.6% from its Wednesday peak at $26,789. Ether (ETH), the second-largest cryptocurrency in terms of market capitalization, was trading around $1,640, experiencing a nearly 3% decline from its high of the previous day.

Both of these assets are currently caught in a "significant downtrend," as indicated by Bitsday Indices' trend indicators, following the sudden drop in digital asset prices last week.

Equity markets have also taken a downturn, with the Nasdaq Composite leading the way with a decline of 1.3%. The S&P 500 has fallen by 0.8%. Notably, Nvidia (NVDA), a prominent chipmaker and AI company, has surrendered most of its gains after the earnings announcement from the previous night, now only showing a 1% increase for the session.

Focus on Powell's Keynote at Jackson Hole

Market analysts are eagerly awaiting the public speech by Federal Reserve Chair Jerome Powell on Friday at the annual Jackson Hole Symposium held by the Kansas City Federal Reserve. This event gathers central bankers and economists at a high-level forum. Investors will closely analyze Powell's speech for any indications regarding the outlook on monetary policy.

John Glover, the Chief Investment Officer of digital asset lender Ledn, mentioned in an email that those hoping for signs of an approaching end to the rate-hiking cycle might be disappointed. He noted that the Fed is at a crucial juncture in their rates cycle. Despite the economy absorbing the tightening of around 500 basis points over the past 16 months without significant negative effects on consumer spending, industrial spending, or unemployment, there are concerns about the impact of higher financing costs on households and businesses, especially when their balance sheets aren't in the best shape.

Economic Signals Show Limited Slowdown

According to a government report released earlier on Thursday, initial jobless claims in the US dropped to 230,000 last week. This is a decrease from the previous week's 240,000 and lower than the economist predictions of 240,000. The data indicates that the strong labor market is experiencing minimal slowdown.

The GDPNow model from the Atlanta Fed is now projecting a rapid economic growth rate of 5.9% for the US in the third quarter. This forecast has increased from the 5.8% projected the previous week and a mere 4% forecast that the model predicted in early August.