For Powell, the current Federal Reserve is in the final stages of battling inflation, with the U.S. election looming in the background, aiming for a soft landing by reducing inflation without triggering a recession. The coming months will be critical, and Powell is expected to proceed with particular caution.

According to a report by Jin10, Northern Trust’s Chief Economist Carl Tannenbaum believes Powell will convey another message to investors, advising them ‘not to overreact to the data’. Earlier this month, the non-farm payroll report rattled global financial markets. Tannenbaum noted, ‘The reaction to the employment report was one of the worst market overreactions I’ve seen in a long time, with the market rushing to embrace the narrative of an economic recession based on just one data point. They were simply looking for a narrative and then created one around an employment figure’.

For Powell, the current Federal Reserve is in the final stages of battling inflation, with the U.S. election looming in the background, aiming for a soft landing by reducing inflation without triggering a recession. The coming months will be critical, and Powell is expected to proceed with particular caution.

Source: TradingView

Returning to digital currencies, BTC formed a V-shaped pattern intraday, with liquidity temporarily collapsing at 3 AM, leading to a sharp dip below 60,000. In the options market, implied volatility (IV) for August 25th has formed a local peak on the curve due to uncertainty surrounding the upcoming global central bank meeting. However, since most economists expect Powell to take a relatively cautious approach, not much risk premium has been priced in.

Source: Deribit (As of 22 AUG 16:00 UTC+8)

Source: SignalPlus

Over the past two trading days, demand for puts expiring in September and late October has steadily increased, particularly around the 55,000 and 56,000 support levels, causing the local skew to tilt towards the bearish side. In August, there has been widespread selling of out-of-the-money puts, which may reflect a positive market response to the recent price rise and the significant reversion of the front-end risk reversal (RR).

Source: SignalPlus，BTC Skew and Trading Distribution

, which may reflect a positive market response to the recent price rise and the significant reversion of the front-end risk reversal (RR).

Source: SignalPlus，BTC Skew and Trading Distribution