Bitcoin News Today: Bitcoin Dives 8% Ahead of Powell’s Jackson Hole Speech Amid Heavy Liquidations

Bitcoin and the broader cryptocurrency market experienced a sharp correction on August 20, 2025, with the leading digital asset falling over 8% from its recent peak above $124,000 to below $113,000. The decline came as traders braced for Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium, where he is expected to signal the central bank’s stance on potential rate cuts and inflation. The crypto market’s total value fell to $3.9 trillion, with Ethereum, XRP, and Solana all posting losses for the day [1].

The recent downturn was exacerbated by heavy liquidations. Over $450 million in crypto positions were liquidated within 24 hours, with Ethereum accounting for nearly $175 million in losses and Bitcoin seeing $101 million wiped out. Long positions represented the majority of these losses, totaling over $373 million. This suggests that overleveraged bullish bets were being forced out as prices retreated [1].

Market Value to Realized Value, a metric that reflects unrealized gains, had climbed to 21% last week, indicating that many investors were sitting on significant profits. Analysts attributed the selling pressure to a combination of profit-taking and leveraged position closures [1].

The pullback comes just two days before Powell’s highly anticipated address. Investors are closely watching for signs of whether the Fed will cut rates in September or maintain its focus on inflation. Recent economic data showed a mixed picture, with headline inflation slowing to 2.7% but core inflation rising to 3.1%, and producer prices increasing by 3.3%. The Fed now faces a delicate balance between cooling inflation and avoiding a prolonged period of high interest rates that could lead to stagflation [1].

Historically, Powell’s Jackson Hole speeches have had a strong influence on crypto markets. In 2022, a hawkish message led to a 10% weekly drop in Bitcoin. This year, analysts expect a more cautious approach, with Powell likely to refrain from committing to a rate cut but leaving the door open for adjustments if inflation trends weaken [1].

Despite the short-term volatility, some analysts remain optimistic. Dom Harz, co-founder of Bitcoin DeFi protocol BOB, described the pullback as a temporary pause rather than a fundamental reversal. “This short-term correction is really just noise; a minor distraction from the fact that Bitcoin and, particularly Bitcoin DeFi, are undeniably rising,” he said. Harz pointed to ongoing institutional demand as a key long-term driver, suggesting that Bitcoin’s adoption by mainstream financial institutions will continue to fuel both its price and technological development [1].

Ruslan Lienkha, chief of markets at YouHodler, noted that while the current correction is still unfolding, Bitcoin’s historical volatility has been declining. “The current correction is still unfolding, and it remains uncertain at which levels it will ultimately stabilize,” he said. He also emphasized that profit-taking at current levels reflects disciplined risk management, particularly for investors operating on medium-term horizons [1].

Lienkha added that weakness in traditional equities could exacerbate the crypto market’s downturn. “A significant correction in equity markets could trigger a deeper pullback in Bitcoin as well,” he warned. However, he also noted that the broader trend of institutional adoption and continued inflows could help offset the short-term weakness [1].

Sources:

[1] Shalini Nagarajan. "Bitcoin Slips Below $113,000 as Crypto Market Slides Before Powell’s Jackson Hole Speech". https://cryptonews.com/news/bitcoin-slips-crypto-market-in-red-before-powll-jackson-hole-speech/