This morning, just as the Fed’s Jerome Powell began his speech, Bitcoin started pumping in a fast-moving short squeeze, driven by inflation narrative.
However, the move just as quickly reversed, plummeting back down to lower than where the pump first began. Traders are calling the move a well-time shakeout. But what comes next for the cryptocurrency?
Bitcoin Blasts $300 In An Hour, Tanks $300 Moments Later
Investors and traders were watching markets like a hawk this morning, expecting some type of movement either way in response to Federal Reserve Chairman Jerome Powell’s speech.
The Fed pledged to keep the inflation rate as close to 2% as possible, but the lack of confidence in recent monetary policy has encouraged investors of all sizes to explore Bitcoin.
More and more small-time investors are buying up the asset in anticipation of higher prices, while institutions and corporations are now considering the cryptocurrency as an economic hedge and treasury reserve asset.
Related Reading | Bitcoin Crossroads: Indicator Signals Short-Term Top, But Final Bullish Impulse Is Possible
The safe haven and hyperinflation narratives surrounding Bitcoin had buyers quick on the trigger this morning during Powell’s speech. But those buyers quickly were met with strong resistance, and the entire pump was erased just minutes later.
Was this a rejection, normal price action, or was this a well-designed shakeout before a much larger move?
BTCUSD 15M Post Powell Speech Pump & Dump Shakeout | Source: TradingView
Was Today’s Powell Pump An Orchestrated Crypto Market Shakeout?
As big as Bitcoin is compared to other crypto assets, it is still illiquid compared to gold or stocks in scope. It takes much less money to move or manipulate crypto markets, giving whales an edge when it comes to trading Bitcoin.
Markets can be unpredictable, but sometimes even the unpredictable gives signals before a sudden move. For example, a cryptocurrency trader recently outlined what a crypto market shakeout looked like, using a real-life example from a recent pump in