Bitcoin News Today: Bitcoin Falls Below $112,000 as Fed Signals No Near-Term Rate Cuts

Bitcoin prices declined below $112,000 in early August 2025, as the Federal Reserve signaled no immediate rate cuts, reinforcing a high-rate environment that intensified risk-off sentiment in the cryptocurrency market [1]. The price drop followed broader market adjustments, with Ethereum falling over 10%, reflecting heightened volatility and uncertainty driven by macroeconomic factors and central bank policy signals [1].

Federal Reserve Chair Jerome Powell emphasized that the labor market remains solid and inflation risks persist, reinforcing the case for prolonged elevated interest rates [1]. This stance has led to widespread declines in crypto-related equities and increased sell-offs in Bitcoin-linked assets. Institutional investors have also adjusted their strategies, with Bitcoin ETF outflows exacerbating the downward pressure [2].

The prolonged high-rate environment has created a fragile backdrop for digital assets, with the U.S. dollar maintaining structural dominance despite economic and political challenges. Market pricing now suggests an 85% probability of a September rate cut, up from 38% before the July jobs report, but the timing of such action remains uncertain [3]. This ambiguity has discouraged aggressive investment in high-volatility assets like Bitcoin, as traders remain cautious about near-term policy easing [2].

In addition to interest rate concerns, the market is closely watching regulatory developments, particularly regarding stablecoins. As volatility persists, regulatory momentum is increasing, potentially shaping future governance frameworks and influencing investor behavior [1]. Analysts suggest that while inflation has cooled, it remains above the 2% target, which may delay a more aggressive policy pivot from the Fed [3]. This has contributed to a bearish market outlook in August, with traders reducing exposure to speculative assets [4].

Despite the launch of new crypto initiatives, including the Truth Social token, these developments have not yet driven significant market optimism. The broader digital asset landscape remains in transition, as investors evaluate how evolving macroeconomic conditions and central bank responses will shape the next phase of market dynamics [4]. As the Fed continues to signal caution, the market remains in a state of adjustment, waiting for clearer signals to determine the next directional move.

Source:

[1] https://www.ainvest.com/news/dollar-fragile-position-trumpian-turmoil-fed-uncertainty-shape-global-markets-2508/

[2] https://www.ainvest.com/news/global-market-volatility-strategic-reallocation-navigating-tariffs-weak-jobs-fed-uncertainty-2508/

[3] https://www.facebook.com/groups/153****223446452/posts/4135****80065197/

[4] https://www.facebook.com/groups/8181****6469717/posts/1290399165915218/