Bitcoin dips as investors await Powell’s speech at Jackson Hole

Bitcoin slipped below $113,000 on Wednesday, briefly touching $112,565, marking a two-week low not seen since August 3, according to Cointelegraph data. Investors were bracing for the U.S. Federal Reserve’s annual Jackson Hole gathering, where Chair Jerome Powell’s remarks could signal the Fed’s approach to interest rate policy heading into September’s Federal Open Market Committee meeting. This speech is highly anticipated by both traditional and cryptocurrency markets, as it could provide clarity on the Fed’s next move regarding interest rates and monetary policy, which are crucial for market dynamics.

Ryan Lee, chief analyst at Bitget exchange, described the decline as a reflection of “rising nerves in the market,” with macroeconomic tensions contributing to “fear spikes” among digital asset traders. He noted that if the $112,000 support level holds until Powell’s speech, it may set the stage for the next phase of Bitcoin’s rally rather than a market reset.

Investor concerns over interest rate policy

Investor anxiety intensified after the U.S. Consumer Price Index (CPI) report on August 12 showed consumer prices rising 2.7% year-over-year unchanged from June but still above the Fed’s 2% target. Following the CPI release, expectations for an interest rate cut fell sharply, with the probability dropping from over 94% to 82%, according to the CME Group’s FedWatch tool. Market participants are closely watching the potential timing of the first Fed rate reduction in 2025, which could act as a major catalyst for cryptocurrency markets.

André Dragosch, head of European research at crypto asset manager Bitwise, highlighted that a sequence of two or three interest rate cuts by year-end could accelerate U.S. money supply growth and provide substantial support for Bitcoin’s ongoing rally. He believes that rate cuts would be a significant macro development to “support” Bitcoin’s trajectory, at least until the end of the year.

Institutional adoption remains strong

Despite short-term sentiment shifts among retail investors, corporate accumulation of cryptocurrencies continued at pace. At least 297 public entities now hold Bitcoin, up from 124 at the start of June. This group includes 169 public companies, 57 private firms, 44 investment and exchange-traded funds, and 12 governments, collectively holding 3.67 million BTC, which represents over 17% of the total supply, according to BitcoinTreasuries.NET. The sustained institutional interest highlights growing confidence in Bitcoin as both a store of value and a strategic asset, even as traders navigate macroeconomic uncertainty.