Investors in cryptocurrency are preparing for the US Federal Reserve’s annual meeting in Jackson Hole on Friday, as Chair Jerome Powell’s comments could provide crucial insights on interest rate policy ahead of September’s Federal Open Market Committee meeting.
On Wednesday, Bitcoin (BTC) momentarily dipped to $112,565, a low not seen since August 3, according to Cointelegraph data.
The drop below $113,000 reflects “growing anxiety in the market” as macroeconomic concerns surrounding Powell’s address have created “fear spikes” among traders of digital assets, stated Ryan Lee, chief analyst at Bitget exchange.
“Allowing the narratives to stabilize and liquidity to return might create an opportunity for a rebound,” the analyst told Cointelegraph, suggesting that if the $112,000 support level remains intact until the speech, it could become a “launching pad for the next phase of the bull run instead of a reset.”
BTC/USD, one-day chart. Source: Cointelegraph
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Corporations continue to accumulate Bitcoin
Concerns among investors regarding a delayed interest rate cut intensified on August 12, after the US Consumer Price Index (CPI) indicated consumer prices rising 2.7% year-over-year, unchanged from June, yet significantly higher than the Fed’s target of 2%.
Following the CPI release, forecasts for an interest rate cut dropped more than 12%, falling to 82% on Wednesday from over 94% a week earlier, as per the latest data from the CME Group’s FedWatch tool.
Fed target interest rate probabilities. Source: CME Group’s FedWatch tool
The first interest rate cut of 2025 could serve as a pivotal market driver, potentially initiating expectations for two or three total interest rate reductions by year’s end, according to André Dragosch, head of European research at crypto asset manager Bitwise.
“Once you witness further rate cuts from the Fed, the curve will steepen, implying additional acceleration and growth in the US money supply,” Dragosch told Cointelegraph, noting that these cuts could be the most significant macro factor to “support” the ongoing Bitcoin rally “at least until the year’s conclusion.”
Related: Ether trader turns $125K into $43M, securing $7M post-market downturn
Despite a notable shift in sentiment among retail investors, corporations persist in acquiring the two leading cryptocurrencies.
Source: BitcoinTreasuries.NET
At least 297 public entities now hold Bitcoin, a rise from 124 at the beginning of June.
These comprise 169 public companies, 57 private firms, 44 investment and exchange-traded funds, and 12 governments that have purchased 3.67 million BTC, accounting for over 17% of the total supply, according to BitcoinTreasuries.NET.
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