Bitcoin News Today: Bitcoin's Fragile Bull Run Faces Crucial Test Before Jackson Hole

Bitcoin’s price correction has intensified as the world’s largest cryptocurrency trades near $115,000, a 7% drop from its record high of $124,000. This decline reflects broader market stress, driven by profit-taking, leveraged position liquidations, and uncertainty surrounding U.S. Federal Reserve policy. The pullback has triggered over $1 billion in crypto market liquidations, with $270 million wiped out in a single session, predominantly from bullish positions [1]. This cascade of forced selling, particularly evident in Ethereum and Bitcoin, highlights the fragility of leveraged positions amid price volatility [1].

The Market Value to Realized Value (MVRV) ratio for Bitcoin currently stands at 21%, indicating that most investors are sitting on substantial gains and facing growing incentives to lock in profits [1]. Santiment’s analysis places the asset in what it describes as a “mild danger zone,” underscoring the risk of selling pressure intensifying as uncertainty looms. Glassnode data also reveals Bitcoin has completed its third major profit-taking phase in the current bull cycle. Such events typically create consolidation periods before potential upward moves, but also increase the risk of momentum shifts if new buyers do not step in to absorb the selling [1].

The Federal Reserve’s policy direction remains a major overhang for Bitcoin. Markets had priced in aggressive rate cuts for months, but recent mixed inflation data and resilient employment figures have weakened expectations of a September rate cut. Polymarket data shows the odds of no Fed rate cut in September rose from 12% to 26% in just days, signaling a shift in market sentiment [1]. Lower interest rates typically favor risk assets like Bitcoin, so the fading of these expectations has removed a key support for the asset’s rally. Investors are now closely watching Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium on Friday for potential clues, though analysts expect limited clarity [1].

Technical indicators, however, suggest Bitcoin remains in a largely bullish position. The 50 EMA has held steady for four months, forming a critical support line, while the 23.6% Fibonacci retracement level near $112,000 offers additional resistance. Traders view this as a key reentry point, with potential for a rebound toward $120,000 or even $124,000. Meanwhile, the 200 EMA, positioned near $103,000, provides a broader base for reaccumulation, and a sustained drop below this level would likely trigger a bearish shift in market sentiment [1].

Market breadth metrics reveal mixed signals. While 63 of the top 100 cryptocurrencies still trade above their 200-day moving averages, a bullish sign for long-term trends, 50% of these assets have dipped below their 50-day averages, indicating short-term weakness. This pattern mirrors the Nasdaq’s performance, with 61 stocks above their 200-day averages and 49 below their 50-day averages, suggesting broader market caution rather than a crypto-specific issue [1]. The altcoin market, meanwhile, presents conflicting signals: Bitcoin’s dominance has fallen to 59% from over 65% earlier in the year, signaling capital rotation into alternative cryptocurrencies. While this can indicate a healthy risk appetite, it also reflects market uncertainty and potential for increased volatility [1].

Bitcoin’s next moves will likely depend on three key factors: clarity from the Fed on its policy path, the extent of leverage unwinding in the system, and whether institutional buyers continue to absorb selling pressure. Analysts remain divided on near-term outcomes, but the prevailing view is that this correction is part of a normal bull market cycle rather than a fundamental shift. Most indicators suggest Bitcoin will recover, though the timeline remains uncertain. Whale accumulation continues, and institutional demand from ETFs and corporate treasuries remains strong, providing a counterbalance to short-term selling [1].

Source:

[1] Bitcoin Price Is Going Down as Market Stress Tests Bulls Before Jackson Hole (https://www.financemagnates.com/trending/bitcoin-price-is-going-down-as-market-stress-tests-bulls-before-jackson-hole/)

[2] Bitcoin Faces Rocky Path As Economic Pressures Mount (https://m.fastbull.com/news-detail/bitcoin-faces-rocky-path-as-economic-pressures-mount-4340337_0)