Fed Policy Signals and Thin Liquidity Push Bitcoin Toward $112,000

Federal Reserve Chair Jerome Powell signaled at Jackson Hole that the balance of risks has shifted and policy adjustments may follow.

His cautious remarks increased expectations for a September rate cut and pushed investors toward risk assets on Friday, but thin weekend trading in digital assets reversed those gains.

Bitcoin trades near $112,300, down 2.3% over 24 hours. Ether stands at $4,687, lower by 2.0%. Solana changes hands at $203.7, also down 2.3%.

XRP trades around $2.99, off 2.0%. Litecoin underperforms, sliding 5.2% to $114.8. The weekend saw reduced liquidity, and a concentrated round of selling late Sunday accelerated losses across the board.

ETF data as of August 22 provide further context. The iShares Bitcoin Trust reported a net asset value of $66.27, while the ARK 21Shares Bitcoin ETF disclosed updated reserves and holdings.

Monday’s creation and redemption flows had not yet been released, leaving traders without confirmation of fresh demand or withdrawal of capital.

Bitcoin Faces Pressured Momentum as Liquidity Signals Weaken

Technical readings highlight the weakening momentum. On the daily chart, Bitcoin’s 14-period Relative Strength Index slipped below 50, pointing to fading strength.

The MACD line remains under its signal with a negative histogram. Prices still rest above a longer-term rising trendline near $101,000, but the market trades beneath clustered short and medium-term moving averages that cap any rebound.

The four-hour chart shows clearer weakness. Bitcoin remains below the Ichimoku cloud as well as the 20- and 50-period moving averages. The RSI holds in the 30s, indicating pressured momentum, while MACD stays negative.

Resistance now lies between $113,500 and $114,500, with support around $111,200 and then $110,600. A sustained move above $114,000 would ease short-term pressure, while failure risks testing deeper levels.

The Global Liquidity Index NDQ line on the daily chart has rolled over in August, diverging from July’s stronger price action. That non-confirmation underscores the role of global liquidity in supporting risk markets and points to thinner depth as a factor in recent volatility.

From a mercantile standpoint, fundamentals remain straightforward. Dovish central bank language reduces expected borrowing costs and can encourage capital allocation to risk assets.

Yet actual flows, whether through spot ETFs or exchange volumes, must validate those expectations. With overhead resistance clear and support defined by weekend lows, traders face a market where liquidity conditions and fund flows will determine direction in the days ahead.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

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