Bitcoin News Today: Bitcoin's Bull Run Hinges on Fed's Next Move

Bitcoin entered a strategic consolidation phase following a sharp rally triggered by U.S. Federal Reserve Chair Jerome Powell's remarks at the Jackson Hole Economic Policy Symposium. The Fed’s potential pivot from tightening to easing monetary policy has reshaped the macroeconomic narrative for digital assets, with Bitcoin responding by surging over 5% on the day of Powell’s speech, reaching nearly $117,000 [1]. This development marked a key inflection point for the bull market, which had been gradually building since early 2024, propelled by institutional adoption signaled through BlackRock’s spot Bitcoin ETF application in June 2023 [1].

However, the post-Powell rally was soon met with profit-taking and short-term volatility. By mid-week, Bitcoin had dipped below $113,000, a level analysts suggested was critical for maintaining bullish momentum. Ryan Lee, chief analyst at Bitget, described this pullback as a “snapshot of rising nerves in the market,” with traders reacting to uncertainties surrounding the timing of Fed rate cuts [2]. The U.S. Consumer Price Index (CPI) data released in late August showed inflation at 2.7%, still above the Fed’s 2% target, prompting a reduction in expectations for an early rate cut [2].

Analysts remained cautiously optimistic. A break below $112,000 could trigger further selling pressure, but key support levels between $111,000 and $110,000 were seen as potential accumulation zones for long-term investors [4]. Michael van de Poppe of MN Capital noted that the $112,000 level represented a pivotal price range, where “longs” could take advantage of discounted buying opportunities [4]. Additionally, data from monitoring tools indicated significant bid orders clustered around the $111,000 to $110,000 range, suggesting institutional demand remained strong despite short-term turbulence [4].

The broader market also reflected this tension between short-term volatility and long-term bullish expectations. The total value of Bitcoin fell to $2.24 trillion, while the global cryptocurrency market dipped by 8.3% in a week to $3.84 trillion [3]. Ethereum followed a similar trajectory, dropping 7% to $4,325, as investors braced for Powell’s official speech and its implications for U.S. monetary policy [3]. The Jackson Hole symposium, a long-standing platform for central bank communication, drew attention from market participants worldwide, who anticipated clues about the Fed’s stance on inflation, employment, and future rate cuts [3].

Institutional interest in Bitcoin continued to grow, with public and private firms, investment funds, and governments collectively holding over 3.67 million BTC by mid-August [2]. This accumulation accounted for more than 17% of the total Bitcoin supply, reinforcing the narrative of Bitcoin as an institutional-grade asset [2]. Analysts like André Dragosch of Bitwise emphasized that a Fed rate cut, once realized, could significantly boost liquidity and money supply growth, thereby supporting Bitcoin’s rally through the remainder of the year [2].

As Bitcoin navigated this consolidation phase, the market remained focused on Powell’s upcoming comments and the Fed’s broader monetary strategy. The interplay between macroeconomic indicators, institutional demand, and liquidity dynamics will continue to shape Bitcoin’s trajectory in the coming weeks. For now, investors are watching closely for signs of renewed upward momentum, with key support and resistance levels acting as potential catalysts for the next phase of the bull run.

Source:

[1] Jerome Powell Blinks At Jackson Hole: Bitcoin Price Rips (https://bitcoinmagazine.com/takes/jerome-powell-blinks-at-jackson-hole-bitcoin-rips-higher-as-fed-signals-dovish-shift)

[2] Investors brace for Powell speech as Bitcoin dips near $112K (https://cointelegraph.com/news/bitcoin-dips-fed-powell-speech)

[3] Bitcoin slides ahead of Fed Chair Powell's speech at Jackson Hole (https://www.aa.com.tr/en/economy/bitcoin-slides-ahead-of-fed-chair-powells-speech-at-jackson-hole/3666292)

[4] Watch These Bitcoin Price Levels Until Jackson Hole Is Over (https://cointelegraph.com/news/bitcoin-eyes-liquidity-at-dollar110k-watch-these-btc-price-levels-next)