Bitcoin (BTC) is down 3.5% this week to
$113,469 after failing to stay above the $117,000–$120,000 resistance zone. The drop followed an unexpected jump in the
U.S. Producer Price Index (PPI) to 3.3% YoY from 2.3%, fuelling concerns that
the Federal Reserve (Fed) may maintain a hawkish stance longer than expected. Hopes for an accelerated rate-cutting cycle in late 2025 have been
dampened, and attention is now focused on Fed Chair Jerome Powell’s upcoming
speech at the Jackson Hole symposium this Friday.
Analytics firm Santiment noted that retail
traders have capitulated. Optimism peaked during last week’s failed breakout
above $117,000–$120,000, but sentiment flipped to “ultra-pessimistic” after a
dip to $112,713. Historically, such extreme retail fear has often marked
turning points and created conditions for recovery. Meanwhile, large investors
have returned to buying. After offloading $659 million worth of BTC ETF shares
from BlackRock, Fidelity, and Grayscale two weeks ago, they reversed course
last week, accumulating $1.07 billion worth at an average price near $119,000.
The U.S. crypto ecosystem continues to expand.
Wyoming launched its own state-backed stablecoin on Tuesday, and Federal
Reserve Governor Michelle Bowman urged banks to accelerate their digital asset
adoption or risk being left behind. These developments add to the longer-term
bullish case, though near-term uncertainty remains tied to Powell’s speech.
Bank of America expects him to signal that interest rates will remain at 4.50%
in September, a scenario that has already weighed on BTC, pressing it into the
$112,000–$113,000 range. If Powell confirms a hawkish stance, the decline could
extend toward $107,000–$110,000. A break below that zone risks sparking panic
and could even provoke criticism from U.S. President Donald Trump and the
Treasury Secretary.
From a technical standpoint, a deep collapse
looks unlikely. BTC has long been set up for a move toward its extreme target
of $155,000–$165,000. The critical hurdle remains the $117,000–$120,000
resistance zone, and once this barrier is decisively cleared, a powerful growth
wave is expected to follow.