Fed's Next Words Could Determine Bitcoin's Stability Amid Volatile Week

Bitcoin stabilized after a period of volatility amid heightened anticipation of Federal Reserve Chair Jerome Powell’s speech and the release of key economic data, including the core PCE price index. The cryptocurrency’s price dipped below $112,000 earlier this week, erasing recent gains and triggering over $1 billion in liquidations within a 30-minute window, according to market analytics platforms Why Did Crypto Drop Today? Crypto Liquidations, Bitcoin News^[4]. This decline followed a sharp correction over the weekend, with Bitcoin losing more than 3% of its value and testing critical support levels. Analysts noted that the market remains sensitive to macroeconomic cues, particularly as investors await signals on the Fed’s future rate trajectory What Investors Need to Watch This Week: Powell’s Speech, GDP Revision, and Core PCE^[3].

The focus for the week has shifted to Powell’s speech, scheduled for Tuesday, September 23, 2025. The Fed chair’s remarks are expected to provide insights into the central bank’s assessment of inflation and economic conditions, which could influence market sentiment. Powell’s previous statements have historically had outsized impacts on asset prices, with even minor shifts in tone affecting trillions in market value What Investors Need to Watch This Week: Powell’s Speech, GDP Revision, and Core PCE^[3]. The speech will be closely scrutinized for hints about the likelihood of additional rate cuts in October and December, particularly as markets digest the implications of the first 2025 rate cut.

Complementing Powell’s address, the release of the August core PCE price index on Friday, September 26, will serve as a critical data point for gauging inflation trends. The core PCE is the Fed’s preferred inflation metric, and analysts anticipate a year-on-year increase of 2.9%, which could reinforce the case for further monetary easing Why Did Crypto Drop Today? Crypto Liquidations, Bitcoin News^[4]. A strong reading might temporarily dampen crypto optimism, while a softer result could bolster arguments for sustained rate cuts, potentially supporting risk-on assets. Additionally, the preliminary Michigan Consumer Sentiment Index and Q2 GDP revision on Thursday will offer further clarity on economic momentum and consumer confidence .

Technical indicators suggest Bitcoin faces near-term uncertainty. The 4-hour chart shows bears maintaining control, with the RSI dipping below neutral levels and the MACD crossing into negative territory. Immediate support is at $110,000, with a breakdown risking a retest of September lows near $107,300. Conversely, a rebound above $117,000 could reinvigorate bullish momentum Why Did Crypto Drop Today? Crypto Liquidations, Bitcoin News^[4]. Traders are also monitoring liquidity conditions, as the recent liquidation event highlighted vulnerabilities in leveraged positions, particularly around key price levels.

Market participants are cautiously optimistic about the longer-term outlook. Historical patterns indicate that Bitcoin often experiences mid-cycle corrections before resuming upward trends, as seen in 2017 and 2021 What Investors Need to Watch This Week: Powell’s Speech, GDP Revision, and Core PCE^[3]. Institutional interest in Bitcoin remains robust, with recent regulatory developments and growing participation from traditional financial players adding a layer of stability to the market. However, the interplay between macroeconomic data and central bank policy will remain pivotal in determining the asset’s trajectory over the coming months.