Bitcoin News Today: Bitcoin Hangs in Balance as Fed Speech Looms and Key Levels Watch

Bitcoin traders are closely monitoring key price levels as the U.S. Federal Reserve prepares to announce its stance on interest rates at the Jackson Hole symposium this week. The cryptocurrency, which has fallen nearly 5% over the past week to a two-week low of $113,000, is now under pressure from both market sentiment and positioning shifts in the options market [1]. Traders are particularly focused on the $110,000 and $120,000 strike prices, where heavy open interest and trading volume are concentrated, according to data from Deribit. These levels serve as critical indicators of demand and supply, and could determine the near-term direction of Bitcoin [1].

The market is displaying a defensive posture, with a negative 25 Delta Skew indicating that traders are paying more for call options than put options, signaling a slight bullish bias [1]. However, this Skew has declined over the past 24 hours, suggesting reduced willingness among traders to maintain their positions ahead of Powell’s speech. The cautious positioning aligns with a broader market correction following revised rate-cut expectations and mixed inflation data [1].

The latest economic data has led to a decline in the odds of a September rate cut. The CME FedWatch Tool shows the probability of a 25-basis-point cut at 75%, down more than 15% since the release of the latest producer price index data [1]. Analysts suggest that Fed Chair Jerome Powell is likely to adopt a neutral and data-dependent tone during his address, rather than confirming or denying a cut [1]. This outcome could disappoint investors already pricing in a reduction, particularly in the short term [1].

Bitcoin’s resistance at $114,000 has been a key focus for traders, with recent data showing the price has struggled to break through this level. Analyst Rekt Capital noted that a convincing breakdown below $114,000 would signal further downside potential, especially in the weekly close relative to this key price point [2]. Meanwhile, bid liquidity appears to be forming around $112,900, according to order-book data from CoinGlass, which may offer temporary support [2].

The broader financial markets are also showing muted reactions to the U.S.-EU trade deal, with U.S. stock indices and Bitcoin both prioritizing the upcoming Fed decision over geopolitical developments. The S&P 500 and Nasdaq Composite Index remained range-bound following the announcement, highlighting the dominant influence of central bank policy on risk assets [2]. If inflationary concerns continue to outweigh employment risks, market expectations for rate cuts may remain tempered, according to Mosaic Asset. This would increase the pressure on Bitcoin and other risk assets, particularly if the Fed does not deliver on current market pricing [2].

As the market awaits Powell’s remarks, the balance between bullish and bearish positions remains fragile. Institutional positioning and macroeconomic developments will play a key role in determining whether Bitcoin can stabilize or face further downside in the coming weeks [1].

Source:

[1] Two Bitcoin Price Levels Sophisticated Traders Are Watching Out For (https://decrypt.co/336363/two-bitcoin-price-levels-sophisticated-traders-are-watching-out-for)

[2] Bitcoin Price Dip Hinges on $114K as Markets Shrug Off U.S.-EU Trade Deal (https://cointelegraph.com/news/bitcoin-price-dip-hinges-on-114k-as-markets-shrug-off-us-eu-trade-deal)