Bitcoin slid to a two-week low of $112,565 on Wednesday, reflecting heightened market anxiety ahead of U.S. Federal Reserve Chair Jerome Powell’s anticipated remarks at the Jackson Hole conference.
The speech is expected to provide critical guidance on the Fed’s approach to interest rate policy for the remainder of the year.
Market volatility ahead of Fed speech
Analysts attribute Bitcoin’s recent price drop to increased uncertainty over U.S. monetary policy.
Ryan Lee, chief analyst at Bitget exchange, commented that the dip below $113,000 represents “rising nerves in the market” and “fear spikes” among traders.
Lee added:
“Now, letting the narratives settle and liquidity return might pave the way for a rebound. If the $112,000 support level holds until the speech, it may provide the setup for the next leg of the bull run rather than a reset.”
Inflation data impacts rate cut expectations
Investor concerns intensified after the U.S. Consumer Price Index showed a 2.7% year-over-year rise, remaining above the Fed’s 2% target.
Following the data, the probability of a 2025 interest rate cut fell from over 94% to 82%, according to CME Group’s FedWatch tool.
André Dragosch, head of European research at Bitwise, suggested that the first rate cut could “support the continuation of Bitcoin’s rally at least until the end of the year.”
Ongoing corporate accumulation
Despite retail investor caution, corporate entities are increasing their bitcoin holdings.
More than 297 public entities now hold bitcoin, up from 124 at the start of June.
This group includes 169 public firms, 57 private firms, 44 investment funds or ETFs, and 12 governments, collectively holding 3.67 million BTC—over 17% of total supply.
