FX.co ★ Cryptocurrency market pauses ahead of Powell's Jackson Hole speech

Bitcoin and Ethereum were trading relatively steadily as investors awaited the remarks of the Federal Reserve Chair.

A number of experts warn that Powell may take a hawkish stance, which could trigger a deeper sell-off in digital assets. The expectation of aggressive rhetoric, aimed at containing inflation at any cost, hangs over the crypto space like a Damocles' sword. Having learned from past experience, market participants are trimming risk exposure and adopting a wait-and-see approach.

Still, the outlook is not one-sided. Some analysts argue that markets have already priced in Powell's potential firmness. In such a scenario, hawkish comments may cause only temporary turbulence, followed by recovery. Much will depend on the specifics: traders will parse not just broad statements but also clues about future Fed moves, timing, and the scale of rate cuts. If Powell leaves room for maneuver and avoids overly categorical language, the market may interpret this as a positive signal.

If the Fed chair chooses to remain vague and offers no guidance on rates, cryptocurrencies are likely to continue consolidating as traders await clearer signals.

Powell previously stated that the September rate decision would depend on incoming macroeconomic data, despite pressure from President Donald Trump to reduce borrowing costs.

Currently, markets price in a 74.4% probability of a 25-basis-point rate cut in September. However, this expectation has softened after mixed economic reports. On the one hand, July's CPI came in weaker than expected, and jobless claims edged higher, pointing to a possible easing of inflationary pressure. On the other hand, stronger-than-expected producer prices suggest that inflation may prove stickier.

The latest FOMC minutes revealed that members remain concerned about inflation volatility, with some officials saying a September cut might not be necessary.

In any case, today's short-term direction will hinge entirely on Powell's remarks. Until then, significant moves are unlikely.

Trading outlook:

For Bitcoin, buyers are targeting a return to $114,100, which would open the way toward $116,000, followed by $117,500. The long-term bullish target sits near $119,300, a breakout above which would signal further upside momentum. On the downside, support is seen at $113,200; a drop below it could quickly send BTC to $110,600, with $108,500 as the extended target.

For Ethereum, a sustained move above $4,376 unlocks potential toward $4,545, with the extended bullish goal near $4,710. If pressure builds to the downside, support lies at $4,237. A failure there could drag ETH to $4,077, with $3,941 as the final target.

What we see on the chart:

• Red lines mark support and resistance zones where price is expected to stall or accelerate.
• Green lines mark 50-day moving average.
• Blue lines mark 100-day moving average.
• Light green lines mark 200-day moving average.

Tests or crossovers of these moving averages typically act as pivot points, either halting price or fueling new impulses.