Bitcoin News Today: Bitcoin's Volatility Unveils the Fed's Shadow Over Crypto's Future

Bitcoin's price has experienced a significant drop, testing key support levels after briefly falling below $113,000 amid ongoing uncertainties surrounding inflation and the Federal Reserve’s policy direction. As of the latest data, the price of Bitcoin was recorded at $116,394.87, having touched a new all-time high of $124,496 earlier in the week. This decline marked a sharp correction from its record highs, as the crypto market faced heightened macroeconomic concerns, particularly related to inflation data and the anticipated Federal Reserve rate decision for September [1].

The drop triggered over $500 million in forced liquidations of long positions, with Bitcoin and Ethereum both experiencing notable declines. Ethereum, the second-largest cryptocurrency by market capitalization, slid 2.5% to $4,354.00 from its recent high near $4,800. This decline was attributed to a surge in investor profit-taking, which led to a wave of forced selling across the crypto market. Over the past 24 hours, liquidations totaled $530.79 million, with $124 million attributed to Bitcoin and $184 million to Ethereum [1].

The broader crypto market also saw a downturn, with the CoinDesk 20 index, a measure of the overall market, dropping 1.2%. Related stocks and ETFs, such as Bitmine Immersion and Bullish, also faced downward pressure. However, some crypto ETFs showed resilience, logging significant inflows for the week, with Ethereum-based funds recording their highest inflows in 14 consecutive weeks [1].

Adding to the market's uncertainty was a statement from Treasury Secretary Scott Bessent regarding the strategic Bitcoin reserve established under President Donald Trump’s administration. Bessent clarified that the reserve would be limited to Bitcoin forfeited to the federal government, as the administration explores budget-neutral pathways to acquire more of the cryptocurrency [1]. This clarification may have influenced investor sentiment, contributing to the recent volatility.

The market is now closely watching the upcoming Federal Reserve annual economic symposium in Jackson Hole, Wyoming, for potential insights into the central bank’s policy direction for the remainder of the year. Additionally, traders are monitoring Thursday’s jobless claims data, which could further impact market expectations for interest rate changes. Analysts suggest that while the current pullbacks are seen as healthy corrections rather than crisis reactions, the sustainability of institutional inflows and renewed buyer conviction will play a critical role in determining the market's next move [2].

Despite the recent dip, some analysts remain optimistic about Bitcoin's long-term trajectory. Bernstein analysts, for instance, anticipate that Bitcoin could reach $200,000 within the next six to 12 months, emphasizing the potential for a continued bull market into 2027 [3]. This forecast is based on positive developments in the regulatory landscape, including the recent executive order allowing cryptocurrencies to be included in 401(k) plans and the introduction of a federal framework for dollar-backed stablecoins [3].

Source: [1] https://www.cnbc.com/2025/08/18/crypto-market-today.html [2] https://cointelegraph.com/news/bitcoin-sell-pressure-palpable-btc-bid-support-stacks-at-105k [3] https://finance.yahoo.com/news/bitcoin-could-reach-200000-within-6-months-during-long-exhausting-crypto-bull-market-173358527.html