[Bitcoin Now] All Eyes on Powell's Speech... Indicators Still 'Bleak'

Mining Costs Exceed Prices
Investor Sentiment Turns to 'Fear'

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Ahead of the Jackson Hole meeting of Jerome Powell, Chair of the Federal Reserve (Fed), which can gauge the direction of U.S. monetary policy, the price of the representative cryptocurrency Bitcoin is rising. However, indicators that could suggest the possibility of future price increases have not significantly improved.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 10:56 a.m. on the 26th, the price of Bitcoin was recorded at $21,554 (approximately 28.76 million KRW), up 0.01% from the previous day. Around 6 a.m. that day, Bitcoin's price rose to the $21,600 range but then gave back the gains. At the same time, on the domestic cryptocurrency exchange Upbit, Bitcoin was trading at 29.25 million KRW, down 0.17% from the previous day.

Investors are taking a wait-and-see approach as they await Chair Powell's speech scheduled for the next day. Powell is expected to speak on the topic of "Economic Outlook," and the market hopes to glean hints from this regarding whether the Fed will implement a giant step (a 0.75 percentage point rate hike) or a big step (a 0.5 percentage point rate hike) at the September Federal Open Market Committee (FOMC) meeting.

So far, indicators that indirectly confirm the Bitcoin price trend have not improved significantly. According to data from cryptocurrency data provider CryptoQuant, miners who had been increasing their Bitcoin holdings from 1,858,496 on the 20th to 1,860,504 on the 24th reduced their holdings again to 1,859,101 on the 25th. If miners reduce their Bitcoin holdings and start selling, it could lead to a price decline.

Also, the fact that mining costs have become higher than the Bitcoin price is increasing the possibility of selling. According to the global economic data analysis platform MacroMicro, from the 15th of last month, Bitcoin's price had remained above mining costs. However, since the 24th, an inversion has occurred where the average cost of Bitcoin mining has exceeded the Bitcoin price.

Investor sentiment is also at a low level. According to cryptocurrency data provider Alternative, the Fear & Greed Index, which expresses investor sentiment as an index, was recorded at 27 points (fear) on this day. This is 2 points higher than the previous day's 25 points (extreme fear) but 6 points lower than 33 points (fear) recorded a week earlier on the 19th. It is also 20 points lower than 47 points (neutral) recorded on the 14th. Alternative's Fear & Greed Index means that the closer the score is to 0, the more extreme the fear and pessimism about investing, while the closer it is to 100, the more optimistic the sentiment.