Is the ECB giving Bitcoin a new direction?
3 min read
The new trading week began as the old week ended – with significant price corrections in the European and American stock indices. The US stock index S&P500 trended weaker for eleven days in a row. The last time the world’s largest and most important stock index corrected south for so many days in a row was in 2008. Today, September 6th, the ongoing correction on the stock markets was transferred to the crypto space, resulting in a significant sell-off of cryptocurrency.
The key crypto currency BTC ended its sideways phase of several weeks and fell back to a two-month low of 18,527 US dollars in the night from Tuesday to Wednesday. You can read in the current BTC analysis whether this sell-off is due to the central banks’ anticipation of tomorrow, and what price targets BTC could set as a result.
All eyes are on ECB President Lagarde
Tomorrow Thursday should already bring beads of sweat to the forehead of many investors. In addition to the key interest rate adjustment by the European Central Bank at 2:15 p.m. (CET), which is eagerly awaited by market participants – probably an interest rate increase of 0.75 percent to 1.25 percent – and the ECB press conference that follows at 2:45 p.m. (CET). the head of the US Federal Reserve, Jerome Powell, will also appear in front of the cameras at 3:10 p.m. (CET). This process must be considered exceptional.
At the moment, one can only speculate about the reason for the Fed head’s spontaneous press appointment. Even the experts at Bloomberg are puzzling over the reason for this short-notice appointment. It remains to be seen whether Powell just wants to reaffirm his strategy of a sustainable reduction in inflation, which he articulated at the Jackson Hole Meeting in the USA, or whether he will present new tools to curb the current inflation rate of 8.5 percentage points in the USA. A concerted action by the two central banks, the Fed and the ECB, to reduce the strength of the US dollar and thus strengthen the recently weak euro exchange rate cannot be ruled out.
Largade appears before the press again
As if that weren’t enough, ECB boss Lagarde appeared again in front of the cameras at 4:15 p.m. (CET). This is also a novelty and could be due to the complex problems in the euro zone. In view of the recently increased more than expected inflation rate in the euro area from 8.9 percent to 9.1 percent, Lagarde could probably feel compelled to explain the monetary policy of the European Central Bank again in more detail, in order to prepare the financial markets for further possible cuts and, at the same time, to disperse the continuing dangers of the ECB’s interest rate policy being hopeless.
ECB boss Lagarde had already surprised the experts with an interest rate increase of 0.5 percentage points during the previous interest rate decision. In view of renewed bets from hedge funds against Italian government bonds in the amount of almost 40 billion euros, the ECB is confronted with new threats to monetary stability in Europe.
It remains to be seen how this concentrated load of press conferences by the two most important currency watchdogs will affect the financial markets and the crypto market. Only one thing is certain: a significantly increased volatility on the markets is to be expected on today’s trading day.
