Bitcoin Slips Toward $112K as Powell Prepares to Take the Stage

Markets are holding their breath this week as Bitcoin slid under $113,000, touching $112,565 — its lowest since Aug. 3 — while traders sharpened their ears for Jerome Powell’s annual Jackson Hole address. The Federal Reserve chair’s words have a history of moving entire markets, and this year’s speech could sketch out the roadmap for U.S. interest rate cuts.

Ryan Lee, chief analyst at Bitget, summed up the mood as “rising nerves,” with Powell’s remarks looming like a thundercloud. Traders are on edge, watching whether $112K can hold as a support level. Lee suggested that if it does, the setup could morph into the next leg of Bitcoin’s bull run rather than a wipeout. That’s a big “if,” but markets love a cliffhanger.

Macro Tensions Weigh Heavy

The anxiety isn’t unfounded. Just days earlier, the U.S. Consumer Price Index came in hot: July inflation rose 2.7% year-over-year, unchanged from June but still stubbornly above the Fed’s 2% target. That single number reshaped expectations on Wall Street — the probability of a September rate cut plunged from 94% to 82%, according to CME FedWatch.

In other words: investors who were near-certain Powell would pivot are now less sure. And uncertainty is poison for risk assets like Bitcoin.

Bitcoin is looking heavy and dropping to $112,000, Source: Bitcoin Liquid Index

Why Powell Matters So Much

André Dragosch of Bitwise pointed out that whenever the Fed does begin cutting, it could unleash a steepening yield curve and fresh money supply growth — perfect rocket fuel for Bitcoin. If the first rate cut lands in early 2026, he argues, it might spark a rally that could run through year’s end.

That’s the paradox: Powell’s hawkish tone hurts in the short term, but the eventual turn to rate cuts could turbocharge crypto markets. Bitcoin has always thrived on excess liquidity, and the Fed is still the ultimate liquidity spigot.

Institutions Keep Buying the Dip

While retail traders twitch at every chart tick, institutions are quietly stacking. Data from BitcoinTreasuries.net shows that at least 297 public entities now hold BTC — more than double the 124 in early June. That includes 169 listed companies, 57 private firms, 44 ETFs and investment vehicles, and even 12 governments. Together they hold 3.67 million BTC, over 17% of the total supply.

So while sentiment swings on Powell’s every syllable, the “diamond hands” seem to be wearing corporate logos. In the long arc of Bitcoin adoption, that might matter more than a $500 price move.

Bitcoin is wobbling around the $112K level, but it’s Powell’s speech — and the broader trajectory of U.S. interest rates — that will set the tone. The Fed has the power to spook or soothe investors, but if liquidity begins to flow again, Bitcoin could be primed for another run. In the meantime, consider this a stress test: who really believes in Bitcoin, and who’s just here for the easy gains?