Bitcoin is trading at $117,600 with volatility close to 1.02%, the lowest since October 2023.
The Federal Open Market Committee minutes may stir market volatility, affecting Bitcoin's direction in the short term.
Powell's speech at Jackson Hole may impact investor sentiment, potentially moving cryptocurrencies, stocks, and bonds.
Bitcoin (BTC) enters the new week with rare calm, even as macroeconomic forces may dictate market direction for the rest of August.
Despite the lower trading volumes that characterize weekends, the leading cryptocurrency has shown low volatility.
Bitcoin's stability as the Fed minutes and Jackson Hole seminar approach.
As of this writing, Bitcoin is trading at $117,600, maintaining a horizontal consolidation over the weekend. Data on BiTBO also shows that the volatility index has dropped to 1.02%, levels not seen since October 2023.
Bitcoin Volatility Index.
Bitcoin investor Mike Alfred points to restraint in the market among traders and investors, highlighting the absence of speculative bubbles.
Wrote on X: "It's great to see a lack of enthusiasm in Bitcoin this week. No gaps in futures to close."
The comment highlights a maturation cycle where the hype among individuals cools, and institutional flows increase, shaping Bitcoin's price movement. Analysts in the Bitcoin archive reinforce this theme, pointing to historically low volatility levels.
They published: "Bitcoin's volatility is close to its all-time lows. Institutional buyers are pressing Bitcoin's volatility to be half of gold's. Weak volatility for 10x returns? I'll take that!"
However, the calm over the weekend may not last long, with several influential U.S. economic indicators already on the horizon.
On Wednesday, policymakers will release the minutes of the Federal Open Market Committee (FOMC), after the latest Consumer Price Index (CPI) report revealed that inflation rose at an annual rate of 2.7% in July.
This will present the July meeting minutes. This comes after the Federal Reserve left rates unchanged at 4.25 – 4.50% with a vote of 9–2. Notably, this was the first double dissent pushing for cuts since 1993. Powell's subsequent press conference was vague, leaving markets searching for clarity.
The minutes may reveal just how divided the committee really is. A dovish tone may push stocks higher, yields lower, and weaken the dollar, all positive outcomes for Bitcoin.
However, a hawkish message will pressure growth and reinforce caution as the main event approaches on Friday.
The week peaks at the Jackson Hole seminar, where Federal Reserve Chair Jerome Powell will deliver his keynote speech on Friday at 10 AM EST.
His statements carry significant weight as previous Jackson Hole speeches have reset expectations around rates and growth. As it happened, the effects rippled through stocks, bonds, and cryptocurrencies.
If Powell emphasizes slowing growth, it would signal a dovish tone. With rate cuts priced in, yields could fall as growth stocks rise, which could benefit Bitcoin amid renewed risk appetite.
However, if the Fed Chair leans towards persistent inflation, such a hawkish tone could raise yields, outperform cyclicals, and potentially disrupt Bitcoin's upward trajectory.
Thus, the markets face multiple catalysts that can guide sentiment for the third quarter. These catalysts include Federal Reserve minutes, Jackson Hole, and other U.S. economic signals.
