Bitcoin and Stocks Rise After Jerome Powell Speech – Year-end Targets for BTC?

Bitcoin rallied nearly $1,500 in less than an hour after the “uber dovish” speech by Federal Reserve Chairman Jerome Powell

Bitcoin and Stocks Rise Together

At the Jackson Hole 2021 symposium, Fed Chairman Jerome Powell said the central bank could start reducing its monthly bond purchases this year. In addition, he also said the Fed will not be in a hurry to raise interest rates.

The US economy has now met the Fed’s inflation target, he said. This is the precondition he and Fed officials have set for scaling back bond purchases. In addition, according to Mr. Powell, the labor market has also made clear progress.

Based on statements from other central bank officials, an announcement about cuts to the bond-buying program could come as soon as the Fed’s September 21-22 meeting.

“The timing and speed of the asset-purchase cuts will not be intended to send a direct signal about when to raise rates. We’ve always made it clear that raising rates is a different and more rigorous test,” Powell said, noting that inflation is firmly around the Fed’s 2% target. He also said the job market needs more time to recover to its fullest extent, but there has been clear progress towards this goal.

Ending the session on August 27, US stocks continued to rise after the announcement that the Fed was not in a hurry to raise interest rates. Energy stocks led the S&P 500, after being among the hardest hit on Thursday. Occidental Petroleum gained 6.9%, Cimarex Energy gained 6.5% and APA Corp gained 5.9%. The main indexes are preparing to close the month in the green. The Dow Jones is up 1.4% in August. The S&P 500 is 2.6% higher and the Nasdaq Composite is up 3.1% month-to-date.

Meanwhile, the US dollar weakened and Bitcoin showed clear strength, hitting a local high of over $49,283 on Binance.

Traders and analysts in the crypto space are extremely bullish.

“It’s time to recover, futures are expiring and BTC price is rising,” summarized analyst Scott Melker.

Trader Cantering Clark, meanwhile, describes Powell’s tone as “uber dovish” and favors long positions.

The bullish trend could continue to extend in the coming weeks for Bitcoin, according to analyst William Clemente. He shares the beginnings of a new “bullish push” move similar to that seen in late July, noting a number of on-chain metrics related to Bitcoin’s “supply shock.” .

“After taking profits earlier in the week, it looks like BTC is starting another bull run. It will be necessary to watch these flows over the next few days, but for now is bullish for the next 1-2 weeks.”

Year-end target for BTC

Bitcoin could rally to $100,000 or bottom out at $30,000 by Christmas — but one of the most popular analysts is betting on the moon.

In a Twitter update on Thursday, PlanB, the creator of the S2F BTC model, cast doubt on Bitcoin’s bearish move.

With BTC/USD trading at $49,000 at press time, PlanB has a lot to be confident about.

His recent prediction for a minimum August close exactly matches yesterday’s price – and if the remaining four predictions are equally accurate, Bitcoin could end 2021 at $135,000.

S2F originally expected the Bitcoin price to hit $100k during this halving, but the turn of May has brought proven accuracy to BTC. PlanB still believes that this pricing model has not been invalidated and that there are no better alternatives.

An alternative model, which currently doesn’t seem to be coming to fruition, is the logarithmic chart of “declining returns” created by Bitcointalk forum user Trololo in 2014.

An adjusted version calculates a $30k price for BTC later this year, but PlanB believes it is less likely than the $100k from the S2F model. PlanB concludes by comparing the two models:

“The coming months will be key.”