Bitcoin News Today: Bitcoin's Plunge Sparks Conspiracy Theories and Fed Warnings

Bitcoin’s price has remained a puzzle for economists and analysts alike, with recent market dynamics sparking debates about potential manipulation and the broader implications for the crypto ecosystem. The digital asset has swung between record highs and sharp corrections, raising questions about whether these movements are driven by genuine market forces or orchestrated interventions. On August 18, 2025, Bitcoin briefly touched a two-week low of $112,565, following a sell-off that saw bid liquidity being taken on exchanges at levels below $113,000 [2]. Analysts like Daan Crypto Trades highlighted that liquidity clusters around $112,000 and $120,000 could act as reversal zones, yet the broader market remains in a state of uncertainty [1].

The debate over potential manipulation intensified with comments from Keith Alan, co-founder of Material Indicators, who pointed to the presence of “plunge protection” at $105,000 and suggested that lower bid liquidity might be artificially driving prices downward [1]. The notion of a “Spoofy the Whale” or the “Notorious B.I.D.”—entities influencing price action—has gained traction among traders, though Alan stressed that assumptions should be made cautiously. Meanwhile, commentator TheKingfisher warned that further declines in Bitcoin could trigger cascading losses in the altcoin market, with leveraged shorts likely to be liquidated in a 5–10% BTC drop [1].

The ongoing volatility has also been attributed to macroeconomic factors, particularly the anticipation of the Federal Reserve’s September interest rate decision. With the central bank preparing to deliver its annual speech at the Jackson Hole economic symposium, investors are closely watching for any hint that a 25-basis-point rate cut is imminent. The CME Group’s FedWatch tool currently prices in an 80–95% probability of such a cut at the September Federal Open Market Committee (FOMC) meeting [2]. Market watchers believe the Fed’s stance on inflation and labor market risks will play a crucial role in shaping the direction of Bitcoin and the broader asset classes [2].

Despite the turbulence, some analysts remain optimistic about Bitcoin’s long-term trajectory. In a recent note, Bernstein’s digital assets team projected that Bitcoin could reach between $150,000 and $200,000 in the next six to 12 months, driven by regulatory developments and institutional adoption [4]. The firm cited recent U.S. initiatives such as President Trump’s executive order on 401(k) crypto integration and the SEC’s Project Crypto as catalysts for broader institutional confidence. Similarly, crypto adoption at the corporate level has surged, with at least 297 public entities now holding Bitcoin, up from 124 in June [2].

Regulatory clarity is increasingly shaping the market environment, particularly with the SEC taking a new approach under Chair Paul Atkins. Unlike his predecessor, who broadly classified most crypto tokens as securities, Atkins has proposed a narrower interpretation, stating that only a small fraction of tokens should be treated as such [8]. He emphasized the importance of a balanced regulatory framework that supports innovation while protecting investors. Additionally, the SEC is forming a dedicated panel to implement recommendations from the President’s Digital Assets Working Group and is expected to collaborate with the CFTC to establish a shared oversight model [7]. Meanwhile, Congress is also advancing the CLARITY Act to provide clearer definitions for crypto assets and their regulation [8].

As Bitcoin continues its unpredictable journey, the broader market remains in a holding pattern, waiting for key macroeconomic and regulatory signals. While some see the recent pullbacks as a healthy correction, others worry about the potential for further declines, especially with the Federal Reserve’s decision looming. The coming weeks will be critical in determining whether the current volatility is a temporary blip or a more profound shift in the trajectory of the crypto market.

Source: [1] Bitcoin analysts point to 'manipulation' as BTC price falls to 17-day low (https://cointelegraph.com/news/bitcoin-analysts-point-to-manipulation-as-btc-price-falls-to-17-day-low) [2] Investors brace for Powell speech as Bitcoin dips near $112K (https://cointelegraph.com/news/bitcoin-dips-fed-powell-speech) [3] This economist said in 2018 that bitcoin was more likely to drop to $100 than hit $100k—here’s what he says he got wrong (https://www.marketwatch.com/story/this-economist-said-in-2018-that-bitcoin-was-more-likely-to-drop-to-100-than-hit-100k-heres-what-he-says-he-got-wrong-45a7b406) [4] Bitcoin could reach $200,000 within 6 months during 'long exhausting bull run' (https://finance.yahoo.com/news/bitcoin-could-reach-200000-within-6-months-during-long-exhausting-crypto-bull-market-173358527.html) [5] Bitcoin sinks to $115000 after hitting its newest record, as... (https://www.cnbc.com/2025/08/18/crypto-market-today.html) [6] Bitcoin Regulations News (https://cointelegraph.com/tags/bitcoin-regulation) [7] SEC Moves Forward With Crypto Regulation Following... (https://www.mitrade.com/insights/news/live-news/article-3-1051991-20250820) [8] SEC Chair Paul Atkins Outlines New Approach to Crypto... (https://www.fxleaders.com/news/2025/08/20/sec-chair-paul-atkins-outlines-new-approach-to-crypto-regulation/)