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Bitcoin Reassessed: Market Adjusts Following Powell’s Remarks While Awaiting Nvidia’s Earnings Impact

On Tuesday, Bitcoin experienced a decline, falling below $62,000 as it consolidated following a surge prompted by Federal Reserve Chairman Jerome Powell’s recent announcement regarding imminent rate cuts. Concurrently, the cryptocurrency market, particularly those associated with artificial intelligence (AI), prepared for potential repercussions from Nvidia’s upcoming earnings report due on Wednesday.

Bitcoin reached a high of $64,879 on Friday after Chairman Powell’s speech at the annual Jackson Hole, Wyoming conference, in which he indicated that monetary policy adjustments were forthcoming. Prior to his remarks, Bitcoin was trading around $61,000. Ethereum also saw a peak at $2,815 after the speech but has since retraced to approximately $2,590.

Market strategist Joel Kruger of LMAX Group noted that a lower interest rate environment could favor cryptocurrency assets, enhancing investor appetite for risk and weakening the U.S. dollar. Research reports from crypto exchange Bybit and 10x highlighted that Powell’s speech raised expectations for increased market liquidity, potentially benefiting risk assets such as Bitcoin. They observed significant inflows to spot Bitcoin exchange-traded funds (ETFs), totaling $252 million on Friday, driven primarily by BlackRock’s iShares Bitcoin Trust (IBIT). While inflows decreased to $202.6 million on Monday, they remained substantial according to Farside Investors.

In terms of market dynamics, Dan Ives, an analyst at Wedbush Securities, projected that Nvidia’s earnings could have a ripple effect across technology stocks. Ives anticipates another strong performance from Nvidia, which could influence Bitcoin and other cryptocurrencies if the results surpass expectations. However, a disappointing earnings report could lead to a downward adjustment in cryptocurrency prices.

Despite a prevailing sentiment that recent correlations between stocks and cryptocurrencies have weakened, Kruger asserts that there could still be a reaction from crypto assets to Nvidia’s performance depending on its deviation from market expectations.

Moreover, AI-focused cryptocurrencies have demonstrated substantial growth in the lead-up to Nvidia’s earnings announcement. Notably, CAIR, a token from Crypto-AI-Robo.com, surged approximately 1,288% over the past week. Other tokens, such as VIDT and PALM, experienced increases of around 159% and 81%, respectively. Ives believes that Nvidia’s performance will reaffirm that the current interest in AI is more indicative of a new technological era, akin to the early days of the internet in the mid-1990s, rather than a speculative bubble seen in 1999. He likened demand for Nvidia’s chips to that of “new oil and gold,” essential for training advanced AI models employed by major technology firms.

As of Tuesday afternoon, Bitcoin was trading at approximately $61,930, reflecting a 2.6% decline over the last 24 hours. Notably, BTC has been able to maintain a position above $60,000 since August 20, though it has yet to reclaim its all-time high of $73,798 reached on March 14. Year to date, Bitcoin’s performance has still resulted in an impressive increase of over 47%. Meanwhile, spot Bitcoin ETFs, including IBIT and ARK 21Shares Bitcoin ETF (ARKB), saw declines exceeding 2% on Tuesday, continuing a slight downward trend observed on Monday, despite a significant gain of approximately 5.5% on Friday.

Bitcoin miners such as Core Scientific (CORZ), Marathon Digital (MARA), Iren (IREN), and Hut 8 (HUT) also faced losses ranging from 3.5% to 8% on Tuesday. Similarly, Coinbase (COIN) stock dipped by 3% on the same day.

In conclusion, as the cryptocurrency market anticipates Nvidia’s earnings report, market participants remain vigilant to potential fluctuations, with Bitcoin’s price and investor sentiment closely tied to developments in the technology sector.

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