Bitcoin quivered but didn't fold after Jerome Powell signaled higher-for-longer interest rates to fight inflation, a pattern that for brave prognosticators could be a hint of a floor for the digital token.

The largest cryptocurrency is down about 6% since Powell's hawkish Aug. 26 Jackson Hole speech underlined that the federal reserve wants to subdue financial markets as part of a push to curb economic activity and contain price pressures.

That's a smaller drop than traders are conditioned to expect in a volatile asset. It's roughly in line with the rout in the tech-heavy Nasdaq 100 index over the period, whereas in the past Bitcoin losses have sometimes been orders of magnitude above the weakness in traditional assets during times of stress.

Bitcoin is staying above $20,000 despite Powell's hawkish turn

“Bitcoin is showing some resilience here as it has clawed back above the $20,000 level, despite widespread stock market weakness,” Oanda Senior Market Analyst Ed Moya wrote in a note. “Crypto traders are not used to seeing Bitcoin withstand a rout on Wall Street, so this could be a promising sign.”

The $20,000 level — while a far cry from the near-$69,000 record hit in November 2021 — is for some market watchers a gauge of whether beaten-down investor sentiment is holding up or vulnerable to yet more damage in a stomach-churning year of losses across assets.

Bitcoin climbed as much as 2% on Tuesday and was trading at about $20,400 as of 10:03 a.m. in London. Tokens ranging from Ether to Solana also posted modest gains amid a steadier mood in global markets.

Average daily Bitcoin moves, either to the upside or downside, have also compressed this month compared with earlier in 2022 — coming in at 2.4% for drops and 1.4% for climbs versus peaks of 4.1% and 3.4% respectively in June, according to data compiled by Bloomberg.

While the smaller swings might also support views that a floor is close, there are other indicators that caution against hasty judgments. For instance, seasonal trends peg September as a tough month and traders are paying a premium for options protecting against falls below $18,000.

For John Toro, head of trading at digital-asset exchange Independent Reserve, cryptocurrencies continue to trade as “a high-beta risk asset.” But he expects the upcoming upgrade of the Ethereum network — the Merge — to continue to “attract investment capital and support dips in cryptocurrency pricing.”