Cryptocurrency investors are preparing for the US Federal Reserve’s annual conference in Jackson Hole this Friday, where Chair Jerome Powell’s statements could signal interest rate policy ahead of September’s Federal Open Market Committee meeting.
Bitcoin (BTC) briefly dropped to $112,565 on Wednesday, marking a two-week low last seen on Aug. 3, as per Cointelegraph data.
The dip below $113,000 indicated “increasing anxiety in the market” as macroeconomic uncertainties surrounding Powell’s address were triggering “fear spikes” among digital asset traders, noted Ryan Lee, chief analyst at Bitget exchange.
“Allowing the narratives to settle and liquidity to return might open a path for a rebound,” the analyst mentioned to Cointelegraph, adding that if the $112,000 support level remains intact until the speech, it could set the stage for the “next phase of the bull run rather than a reset.”
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Corporations continue to accumulate Bitcoin
Investor anxiety regarding a potential delay in interest rate cuts was heightened on Aug. 12 after the US Consumer Price Index (CPI) revealed that consumer prices rose 2.7% year-over-year, remaining unchanged from June but significantly above the Fed’s 2% target.
Following the CPI announcement, expectations for an interest rate cut plummeted by over 12%, falling to 82% on Wednesday from over 94% just a week prior, according to the latest figures from CME Group’s FedWatch tool.
The first interest rate cut of 2025 could serve as a major market catalyst, potentially igniting expectations of two or three total interest rate reductions by the year’s end, according to André Dragosch, head of European research at the crypto asset management firm Bitwise.
“Once you see further rate cuts from the Fed, the curve will steepen, indicating greater acceleration and growth of the US money supply,” Dragosch explained to Cointelegraph, emphasizing that these cuts might represent a significant macro development to “support” Bitcoin’s continued rally “at least until year-end.”
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Despite a notable shift in sentiment among retail investors, corporations have persisted in their acquisition of the world’s top two cryptocurrencies.
At least 297 public entities now hold Bitcoin, an increase from 124 at the start of June.
These entities comprise 169 public companies, 57 private firms, 44 investment and exchange-traded funds, and 12 governments, which together acquired 3.67 million BTC, accounting for over 17% of the total supply, according to BitcoinTreasuries.NET.
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