Bitcoin braces for Fed pivot: Key support level holds as markets anticipate policy shift

Bitcoin traders are holding their breath as the Federal Reserve signals potential policy changes—just as BTC tests crucial support levels.

Market watchers see the Fed's looming decision as the ultimate stress test for Bitcoin's resilience. The digital asset has been trading within a tight range, with institutional players positioning for volatility.

Why this matters: Traditional finance meets digital frontier. When central banks twitch, crypto markets convulse—proving once again that even decentralized assets can't escape the gravitational pull of old-school monetary policy.

Analysts note that Bitcoin's correlation with traditional risk assets remains uncomfortably high. The Fed's next move could either validate crypto as a legitimate hedge or expose it as just another speculative toy for Wall Street's amusement.

Remember: In finance, 'innovation' usually means finding new ways to lose old money.

Current BTC price scenario

The Bitcoin price forecast is somewhat challenging in this scenario, as the market awaits today’s FOMC decision and investors attempt to align their price expectations with the news.

Catalyst

A rainy start to this week began with an expected ~$3 billion in realized profits on Aug. 16, which precipitated a quick ~1.9% decline to ~$114,707 this week.  The same window’s crypto-news price coverage identified negative macro tone and profit-taking as drivers.

Support focus

The cost-basis distribution based on glassnodes reveals a significant cluster at ~$116,963 (about 3.6% of supply).  The likelihood of a liquidity sweep toward approximately $110,000 before stronger bids appear increases if this band is not held or reclaimed.

Accumulation

Glassnode’s Accumulation Trend Score cooled from ~0.57 to ~0.20, implying weaker HODLer demand into the retreat (i.e., more redistribution than stacking at current prices).

Key signs Fed Chair uncertainty could drive BTC

Sign 1 – Profit-taking + reduced accumulation weaken support

Profit-taking and ETF outflows caused Bitcoin to slide into the $113–$115K range, according to crypto.news, Bitcoin crypto price prediction; the on-chain read indicates cooler accumulation; these factors undermine short-term spot support.

Sign 2 – September rate-cut odds fell

CME FedWatch probabilities also fluctuated, and polymarket pricing for a September cut recently dropped from about 80% to about 70%. The “macro tailwind” narrative for bitcoin is dulled by a lack of trust in short-term softening.

Sign 3 – Trump weighing Powell replacements adds policy uncertainty

Multiple possible Powell successors and scenarios where a replacement is contemplated vs Powell remaining are discussed in recent reporting; these inconsistent signals increase policy uncertainty and risk premia for duration-sensitive assets like BTC.

What Fed Chair’s policy mean for BTC price prediction?

Base scenario (choppy, cautious)

According to the latest chart outlook, Bitcoin is expected to range between $110,000 and $120,000, with $116,963 serving as the pivot, if cut odds remain low and Fed-chair speculation continues. As traders look for liquidity and fade breakouts, whipsaws are likely to FORM around this node.

Bullish case (clarity + easing)

If $116,963 is regained and held, clear guidance for September/November relaxing and less replacement chatter might rekindle flows and set up a retest of $120K–$124K (previous ATH region).

Bearish/liquidity grab

On-chain softness plus order-book gaps projection outlines a stop-run toward approximately $110,000 (or even $108K in a deeper flush) before new bids if cut odds continue to deteriorate and chair uncertainty increases.

Summary: How to read into the current price action of Bitcoin?

Keep an eye on reclaims and acceptance over about $116,963 on volume; long-term acceptance supports upward probes.  Rejected or unsuccessful reclaims leave $112K to $110,000 available. 

Keep an eye on accumulation indicators (Glassnode’s Accumulation Trend Score) for a reversal; if it rises above 0.20, it is favorable. 

Keep an eye on Powell stories and cut-odds drift, which are the swing variables for risk appetite over the next two to four weeks.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.