Bitcoin pulled again and shaped a dangerous sample this week as market contributors pared again their Federal Reserve rate of interest reduce expectations.
Abstract
- Bitcoin value pulled again after the recent producer value index knowledge.
- Polymarket odds of Federal Reserve cuts have fallen prior to now few days.
- Technical evaluation factors to extra draw back earlier than an eventual rebound.
Bitcoin (BTC) retreated from the all-time excessive of $124,420 to $117,760 finally verify Saturday, Aug. 16. Its market cap is $2.34 trillion, down from a peak of $2.47 trillion. This decline coincided with the declining odds of Federal Reserve cuts amid considerations about stagflation.
Fed Chair Jerome Powell, a lot to President Trump’s dismay, views a robust labor market as one paired with secure costs. At present, that stability is missing within the U.S., the place tariffs enacted on Aug. 7 are driving up prices as corporations move import duties onto shoppers.
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Bitcoin pressured by falling Fed reduce odds
BTC value jumped to a document excessive of $124,420 on Aug. 14 after the Bureau of Labor Statistics revealed an encouraging shopper inflation report. Whereas the core Client Value Index rose to three.1%, the headline determine remained unchanged at 2.7%.
The sentiment modified a day later after the producer value index knowledge soared to three.6% in July. This report led to jitters about whether or not the Fed would reduce rates of interest in September, as many analysts had anticipated.
These jitters emerged on Friday when the U.S. launched its newest inflation expectation report. A survey by the College of Michigan confirmed that inflation expectations for 2026 jumped to 4.9% and three.9% for the following 5 to 10 years.
These numbers, along with the weak nonfarm payrolls report earlier this month, means that the US is heading in direction of stagflation, which is characterised by excessive inflation and gradual financial progress.
As we speak’s College of Michigan (UMich) shopper sentiment knowledge fell wanting consensus forecasts in a stagflationary route. Particularly, the patron confidence index declined from 61.7 in July to 58.6 this month (with present situations at 60.9 and expectations at 57.2).…
— Mohamed A. El-Erian (@elerianm) August 15, 2025
Due to this fact, Bitcoin value pulled again as merchants pared again their Federal Reserve rate of interest reduce odds. Polymarket knowledge reveals that the percentages of a September reduce, whereas nonetheless excessive, have declined from 80% to 70% as of right this moment.
Traditionally, BTC value does properly when the Federal Reserve is slicing rates of interest or when the reduce expectations are rising.
Bitcoin value additionally pulled again after Austan Goolsbee, an FOMC member, warned that the financial institution wanted extra knowledge to find out the following plan of action as a result of the influence of recent tariffs would take time.
BTC value technical evaluation
BTC value chart | Supply: crypto.information
The day by day timeframe chart reveals that Bitcoin value has come beneath strain prior to now few days. This strain started to type as a extremely bearish double-top sample at $123,200, with a neckline at $112,000.
Bitcoin has additionally shaped a bearish divergence sample, as evidenced by the Relative Power Index and the MACD indicators, which have shaped decrease lows and decrease highs.
Due to this fact, BTC value will seemingly pull again within the subsequent few days after which resume the uptrend. Extra features shall be confirmed if it rises above the all-time excessive of $124,420.
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