Bitcoin News Today: Bitcoin Bounces Amid Fed Drama and $500M in Lost Bets

Bitcoin prices edged higher to $111,000 on Monday, rebounding from a seven-week low amid growing concerns over the Federal Reserve's policy direction and broader economic uncertainty. The cryptocurrency's recent volatility has been driven by a combination of macroeconomic pressures, including shifting interest rate expectations, a potential erosion of the Fed's independence, and large-scale market movements triggered by institutional players.

The price movement comes after the U.S. economy showed mixed signals. Hiring slowed sharply, while underlying inflation indicators rose, complicating the Fed's dual mandate of managing inflation and employment. Federal Reserve Chair Jerome Powell hinted at potential rate cuts during his Jackson Hole address, signaling a cautious approach amid growing risks to the labor market. However, President Donald Trump has been vocal in his criticism of the Fed, pressuring it to cut rates and even attempting to remove Governor Lisa Cook, a move analysts warn could undermine the central bank's independence and long-term economic stability.

Market participants are closely watching the Fed's next steps, with traders now pricing in an 87% probability of a rate cut in September, up from 75% before Powell's speech. The prospect of lower rates has led to a rally in bond markets, with Treasury yields falling as investors reposition portfolios in anticipation of eased monetary policy. Yet, the uncertainty surrounding the Fed's independence and the possibility of political interference have raised concerns over potential inflationary risks and market instability.

Bitcoin's recent dip below $109,000 triggered liquidation events, with nearly $500 million in long positions being wiped out since early August. Analysts have highlighted key support levels around the $100,000–$107,000 range, where the cost basis of short-term investors and the 200-day simple moving average intersect. These levels are viewed as critical for determining whether the current pullback will stabilize or deepen. Some traders, however, remain optimistic about a short-term rebound, with exchange order books indicating that key liquidity levels on the downside have been exhausted. This has led to speculation that a short squeeze could push the price back toward $114,000.

The recent price action has also drawn attention to the broader cryptocurrency market, where Bitcoin's struggles have spilled over into altcoins. Ethereum and other major tokens have seen significant declines, contributing to a $100 billion drop in the total crypto market capitalization within 24 hours. The sell-off has been attributed to coordinated actions by large-scale holders, with reports indicating that a single entity dumped 24,000 Bitcoin worth over $2 billion, accelerating the downward pressure. Analysts suggest that the involvement of institutional players or coordinated efforts by multiple “whales” has amplified the volatility, creating a challenging environment for traders.

Looking ahead, the convergence of macroeconomic uncertainty, political pressures on the Fed, and large-scale market movements is likely to keep Bitcoin and other cryptocurrencies under close scrutiny. While the immediate focus remains on the Fed’s September meeting and potential rate cuts, the broader implications of Trump's push to reshape the Federal Reserve board could have long-term effects on monetary policy and market stability. Investors are advised to closely monitor both the Fed's policy trajectory and on-chain metrics, as they will likely shape the near-term outlook for Bitcoin and the wider crypto market.

Source: [1] Bitcoin drops under $109K: How low can BTC price go? (https://cointelegraph.com/news/bitcoin-drops-under-109k-how-low-can-btc-price-go-next) [2] Panicked Traders Brace For $100000 Bitcoin And $4000 (https://www.forbes.com/sites/digital-assets/2025/08/26/bitcoin-price-flash-crash-panic-suddenly-wipes-100-billion-from-crypto-market/) [3] Trump's move to fire Lisa Cook threatens Fed independence (https://abcnews.go.com/Business/trumps-move-fire-lisa-cook-threatens-fed-independence/story?id=124985193) [4] Trump vs the Fed: Why this row could rattle the US economy (https://www.bbc.com/news/articles/clydvlx504eo) [5] Powell suggests rate cuts are coming — but not because (https://www.cnn.com/business/live-news/fed-powell-jackson-hole) [6] Trump Media, Crypto.com launch new crypto treasury firm (https://www.reuters.com/legal/government/trump-media-cryptocom-launch-new-crypto-treasury-firm-via-spac-deal-2025-08-26/) [7] Crypto.com Coin(CRO) Price Today, CRO to USD Real- (https://stocktwits.com/symbol/CRO.X)