Bitcoin News Today: Bitcoin faces critical juncture amid Fed policy and on-chain sell pressure

Bitcoin is navigating a pivotal moment in early August as mixed signals from price action and on-chain data highlight both caution and underlying strength in the market. After dipping to a three-week low below $112,000, the cryptocurrency has shown signs of a potential rebound, drawing comparisons to past price patterns but with a distinct macroeconomic backdrop. Analysts are divided on whether Bitcoin is repeating its January-to-April 2025 bearish trajectory or setting up for a fresh rally toward new record highs.

The current price environment is influenced by broader macroeconomic factors, particularly the U.S. Federal Reserve’s monetary policy. With market expectations shifting toward a 0.25% interest rate cut in September, investors are recalibrating their strategies, which could either stabilize or further fuel Bitcoin’s volatility. Fed Chair Jerome Powell faces mounting pressure from President Donald Trump, who has criticized the Fed's restrictive stance and even called for Powell’s resignation. The central bank’s next moves are expected to have a direct impact on Bitcoin's short-term direction.

Meanwhile, Bitcoin holders are de-risking their positions. On-chain data from CryptoQuant shows a significant outflow of Bitcoin to exchanges, especially from short-term holders and whales. On August 1 alone, over 40,000 BTC were moved to exchanges at a loss, signaling a broad sell-off. The “exchange whale ratio” has reached levels described as “dominating,” suggesting continued downward pressure unless large investors start to accumulate again. “When large deposits coincide with whales dominating these deposits, the market typically enters a phase of selling pressure and rapid decline,” noted CryptoQuant contributor Arab Chain.

However, not all the signs are bearish. Despite the recent dip, demand for Bitcoin remains robust. Metrics such as the Apparent Demand indicator, which measures newly-mined Bitcoin against inactive supply, currently show a positive trend. Over the past 30 days, around 160,000 BTC have been accumulated, and accumulator wallets—those that only buy and never sell—have increased their holdings by 50,000 BTC. This suggests that while short-term volatility is a concern, long-term demand remains intact.

Some traders are optimistic about a potential rebound. $116,500 has emerged as a key psychological level, with some analysts referring to it as a “magnet” where short positions are likely to be liquidated. If Bitcoin can hold above the 50-day exponential moving average, which currently sits near $112,900, it could signal a more bullish outlook for the rest of the month. Analysts like CrypNuevo argue that while the recent price pattern resembles January’s pullback, the current macroeconomic context is different, reducing the likelihood of a repeat of the earlier bearish trend.

In summary, Bitcoin is at a critical juncture, with market participants watching for clues on whether this is a temporary correction or the beginning of a larger downturn. While on-chain data and whale activity point to continued selling pressure, demand indicators remain positive. The upcoming Fed meeting and evolving interest rate expectations will be crucial in determining Bitcoin’s path forward. As one trader noted, “Smart money knows this is where the fuel for a move is,” highlighting the anticipation for a decisive breakout in either direction.

Source: [1] Is BTC repeating path to $75K? 5 things to know in Bitcoin this week (https://cointelegraph.com/news/is-btc-repeating-path-to-75k-5-things-bitcoin-this-week?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound)