First Mover Americas: Will BTC React to Powell’s Jackson Hole Speech?

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Bitcoin traded between $60,000 and $62,000, keeping the broader crypto market steady with observers split on what the Federal Reserve Chair Jerome Powell will say at Friday's Jackson Hole meeting. "Given the good CPI reading last Wednesday, we're likely to get a dovish Powell tone Friday," Amberdata said in the weekly newsletter, hinting at a potential favorable development for risk assets, including cryptocurrencies. Meanwhile, the crypto-options-focused tech platform SignalPlus said Powell might be cautious. Over at Deribit, the options market isn't anticipating a Powell-induced volatility explosion. "Single-day BTC options indicate a 2.5% price swing [in either direction]," Martin Cheung, head of options trading at Pulsar, told CoinDesk. Markus Thielen, founder of 10x Research, said the setup looks good, with the ascending triangle pointing to a minor rally.

Republican presidential candidate Donald Trump is promoting a decentralized-finance platform called "The DeFiant Ones" in his latest move to win over crypto voters ahead of the Nov. 4 elections. "For too long, the average American has been squeezed by the big banks and financial elites,” Trump said on Truth Social. “It’s time we take a stand—together. #BeDefiant.” Crypto believers have long said that digital assets and blockchain technology can help unbanked people access the financial services industry. As of now, little is known about Trump's new platform, including its launch date.

Decentralized finance (DeFi) is making a comeback, and the total value locked in these projects focused on democratizing finance is expected to hit an all-time high next year, according to Steno Research. The DeFi Summer of 2020 came about as the U.S. Federal Reserve lowered interest rates to near zero. "Interest rates are the most critical factor influencing the appeal of DeFi, as they determine whether investors are more inclined to seek out higher-risk opportunities in decentralized financial markets," analyst Mads Eberhardt wrote, adding that lower interest rates also reduce the incentive to hold dollar-pegged stablecoins and spur more risk-taking in the broader crypto market.

Chart of the Day

• The chart shows ether's 30- and 60-day options skews remain negative, a sign of puts offering downside protection trading at a premium to calls.
• Some traders seem to be taking protective puts ahead of Powell's speech.
• Source: Amberdata

- Omkar Godbole

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