Rising Market Tensions

On Wednesday, data showed that Bitcoin briefly dipped to $112,565, marking its lowest point since August 3.

Ryan Lee, chief analyst at Bitget, said the decline reflects “rising nerves in the market.” According to Lee, the macroeconomic uncertainty surrounding Powell’s speech has triggered “fear spikes” among crypto traders. However, he noted that if the $112,000 support holds, it may not signal a reset but rather set the stage for the next leg of the bull run.

Inflation and Rate Cut Expectations

On August 12, the U.S. Consumer Price Index (CPI) showed a 2.7% year-over-year increase. While unchanged from June, the figure remains above the Fed’s 2% target.

Following this, expectations for a September rate cut decreased. According to CME Group’s FedWatch tool, the probability dropped to 82%, down from 94% a week earlier.

André Dragosch, Head of European Research at Bitwise, emphasized that potential Fed cuts in 2025 could be a major catalyst for the markets. He argued that lower rates would boost U.S. money supply and strongly support Bitcoin’s rally at least until the end of the year.

Corporations Keep Accumulating Bitcoin

Despite weaker sentiment among retail traders, institutional players continue to accumulate Bitcoin.

The number of entities holding Bitcoin has surged from 124 in early June to 297. This includes 169 public companies, 57 private firms, 44 investment funds, and 12 governments. Together, they now hold 3.67 million BTC — representing more than 17% of the total supply.

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