Bitcoin Faces Pressure as Fed Rate Cut Hopes Dwindle
Bitcoin (BTC) price saw a decline this week. It fell from an all-time high of $124,420 to $117,760. Its market cap shrunk to $2.34 trillion from $2.47 trillion.This drop happened because the odds of a Federal Reserve rate cut decreased.
Fed Chair Jerome Powell wants a strong job market with steady prices. But right now, the U.S. economy is off-balance. Tariffs imposed on August 7th increased company costs. These costs got passed to consumers.
On August 14th, BTC hit a new peak after positive consumer inflation figures came out. However, on August 15th, the producer price index showed a 3.6% rise in July. This made people worry about whether the Fed would cut rates in September as was to be expected.
- Bitcoin price fell due to shrinking hopes of a Federal Reserve rate cut.
- potential stagflation – high inflation coupled with slow growth – looms over the U.S.
- Technical indicators point to further short-term declines before a possible recovery.
A survey by the University of Michigan showed rising inflation expectations. For 2026, these expectations hit 4.9%. this supports fears of stagflation.
Polymarket data suggests the probability of a September rate cut fell from 80% to 70%. Historically, BTC performs well during rate cuts or when cut expectations rise.
Technical analysis shows a bearish “double-top” pattern for BTC at $123,200, with support at $112,000.Continued declines are likely unless BTC breaks above $124,420.
