Bitcoin News Today: Fed Signals Spark Bitcoin's Descent Below $112K Amid Market Jitters

Bitcoin's price slipped below $112,000 this week, driven by cautious investor sentiment in the wake of the U.S. Federal Reserve’s mixed signals on interest rate policy and the broader economic outlook. The drop came after Beth Hammack, a high-ranking Fed official, stated that the Fed should not lower interest rates in the short term due to persistently high inflation levels [1]. These remarks, delivered during the Jackson Hole symposium, heightened uncertainty in the cryptocurrency market and coincided with a bearish price movement for Bitcoin [1].

Bitcoin’s decline to below $112,000 marked a notable correction from its recent all-time high of $124,200. The move was accompanied by a broader 1.45% drop in the total market capitalization of the crypto sector, which fell to $3.8 trillion [1]. Smaller altcoins, such as Mantle, Virtuals Protocol, and Ethena, also experienced significant losses. This price action has raised concerns about the potential for a prolonged bearish phase, particularly with the emergence of a technical chart pattern known as an “ascending wedge” on Bitcoin’s weekly chart [1]. The wedge formation typically signals an impending downward breakout, reinforcing the bearish sentiment among traders.

Technical indicators further support the potential for a continued decline. A “shooting star” pattern on Bitcoin’s weekly chart adds to the bearish outlook, suggesting a reversal after a strong move higher [1]. The confluence of these chart patterns indicates heightened vulnerability for Bitcoin as it approaches critical support levels. Analysts have identified $90,000 as a key threshold, with further downward movement likely to have broad negative repercussions across the cryptocurrency market [1]. However, some traders argue that a drop below $90,000 is not certain, with the $103,000 and $106,000 levels acting as crucial short-term supports [1].

Despite the recent downturn, there have been signs of short-term bullish momentum. On Friday, Bitcoin briefly surged to $117,300 following a hint from Fed Chair Jerome Powell about a potential interest rate cut. The price action led to the liquidation of $379.88 million in short positions, with Bitcoin accounting for $56.4 million of that total [2]. This volatility underscores the sensitivity of the crypto market to macroeconomic signals and policy expectations. Analysts such as Michael van de Poppe and Jelle have observed that the recent upward move could indicate a return of the Bitcoin uptrend, with potential targets reaching as high as $200,000 by year-end [2].

Investor behavior has also been influenced by the performance of Bitcoin treasury companies and broader market speculation. Strategy, a prominent Bitcoin acquisition firm led by Michael Saylor, announced a shift in its equity guidance, allowing it to issue stock at lower multiples of its net asset value. The move has sparked debate, with some analysts warning of a potential “spiral of doom” scenario if the company is forced to sell Bitcoin to fund its operations [3]. This has added to the market’s unease and contributed to a 25% drop in Strategy’s share price since its peak in mid-July [3].

Looking ahead, the coming weeks will be crucial for Bitcoin’s trajectory as the market awaits Powell’s full speech at Jackson Hole. The Fed’s stance on inflation and employment data will play a decisive role in shaping investor expectations. According to the CME Group’s FedWatch tool, the probability of a September rate cut has decreased, with the odds of no cut rising to 36% [5]. The outcome of Powell’s speech could either reinforce bearish sentiment or provide the catalyst for a renewed rally.

In the short term, Bitcoin remains under pressure at key psychological and technical levels. The $114,000 mark has acted as a resistance point, with bulls struggling to push the price above it. Traders are closely monitoring the weekly closing price relative to this level, as it could signal a continuation of the downward trend [5]. Meanwhile, bid liquidity remains concentrated between $112,900 and $114,000, providing some near-term support for Bitcoin [5].

The market’s reaction to recent macroeconomic and geopolitical developments highlights the inherent volatility of the crypto asset class. While Bitcoin remains a focal point, the broader market is equally exposed to uncertainty as investors rebalance their positions and await clarity on future policy moves. For now, the price action remains range-bound, with the outcome of the upcoming Fed speech likely to dictate the next major move in Bitcoin’s trajectory.

Source:

[1] Bitcoin crash risk looms if interest rates stay elevated - InvestX (https://investx.fr/en/crypto-news/bitcoin-risk-crash-interest-rates-shouldnt-lowered/)

[2] Bitcoin price breakout to $117K liquidates bears, opening ... (https://cointelegraph.com/news/bitcoin-price-breakout-to-dollar117k-liquidates-bears-opening-door-to-fresh-all-time-highs)

[3] Crypto Is Braced For A Fed Price Bombshell As 'Spiral Of ... (https://www.forbes.com/sites/digital-assets/2025/08/22/serious-spiral-of-doom-strategy-warning-fuels-sudden-bitcoin-price-crash-fears/)

[4] Bitcoin Price Falls — And As Usual, Nobody Knows Why (https://bitcoinmagazine.com/markets/bitcoin-price-falls-nobody-knows-why)

[5] Bitcoin Ignores US-EU Trade Deal With $114K In Focus (https://cointelegraph.com/news/bitcoin-price-dip-hinges-on-114k-as-markets-shrug-off-us-eu-trade-deal)