Bitcoin plunges in front of the remarks of the Fed Jerome Powell chair in Jackson Hole

The decline in the two largest cryptocurrencies follows a broader drop in the market, with the total market capitalization of all cryptocurrencies down 1% of the day to 3.9 billions of dollars. Meanwhile, the S&P 500 has been down 0.3% since the market opening on Thursday.

“Investors seem to be more and more doubtful that Powell reports a pivot to Jackson Hole,” research manager of Crypto, Coinshares said to James Butterfill, Coinshares, said Fortune.

The decline of a week on the digital asset market comes as traders try to predict whether the Fed will reduce interest rates in September, which will likely encourage money to flow from the US treasury invoices in risky assets with higher potential yields, such as crypto.

Since 1982, the Federal Reserve Bank of Kansas City has organized an economic conference in Jackson Hole. The Fed chair generally speaks during the event and, as with any Powell public speech, investors will look through its remarks to glean if the federal reserve will reduce the rates.

Last week, analysts were almost certain that the rate reductions were imminent after the Bureau of Labor Statistics pointed out only a moderate increase in total inflation in July by 2.7%. It was less than what many were waiting for. The markets have jumped and Bitcoin marked another top of all time.

But, two days later, the BLS indicated that the prices of goods manufactured by American producers increased by 0.9% in July, the largest increase in what is called the producer prices index since June 2022. The news has led to a drop in cryptographic markets, which negotiated last week.

However, some market observers are optimistic. “This decrease looks like a small correction for me, not a trendy break,” said Ira Auerbach, head of the venture capital arm connected to the developer of the Blockchain Offchain Labs and the former chief of Nasdaq digital active ingredients, Inc.

He said that Pro-Crypto policy, such as the recent decree of President Donald Trump which allows to encrypt and other private assets in 401 (K), has remained intact. Auerbach also underlined the increased adoption of stablecoins, or cryptocurrencies linked to underlying assets such as the US dollar.

“I expected that this decline is absorbed,” he added, “and so that the higher trend continues once the macro fog has been erased.”