Bitcoin prices slid Friday, adding to steep declines this week as investors grew cautious ahead of Federal Reserve Chair Jerome Powell’s address at the Jackson Hole Symposium. The world’s largest cryptocurrency fell 0.9% to $112,943.40 by 01:29 ET (05:29 GMT), leaving it down nearly 4% for the week.
Profit-taking after August’s record highs compounded the decline, while diminishing expectations for a September interest rate cut further pressured sentiment. Broader crypto markets also weakened, signaling that investor appetite for speculative assets remains fragile.
China’s reported consideration of state-backed, yuan-denominated stablecoins provided little support, as the country maintains a ban on most cryptocurrency trading since 2021.
Fed Uncertainty Weighs on Markets
The Federal Reserve’s trajectory on interest rates remains the focal point for digital asset markets. Minutes from the central bank’s late-July meeting showed broad support for holding rates steady, tempering bets on imminent easing.
CME FedWatch data revealed futures traders now see a 73.1% chance of a 25-basis-point cut in September—down sharply from more than 90% last week. A stronger-than-expected August Purchasing Managers Index reinforced perceptions that the U.S. economy retains resilience, further reducing the likelihood of near-term cuts.
Powell has thus far avoided firm commitments on monetary policy, pointing to uncertainty around the inflationary effects of President Donald Trump’s trade tariffs. For cryptocurrencies, which thrive in looser liquidity conditions, the prospect of “higher-for-longer” rates poses a significant headwind.
Key factors driving sentiment include:
- Dwindling Rate-Cut Odds: September cut odds fall to 73.1% from 90%+ last week.
- Economic Resilience: U.S. PMI data showed stronger-than-expected growth.
- Policy Uncertainty: Powell’s speech seen as pivotal for near-term direction.
Altcoins Mirror Bitcoin’s Decline
The weakness extended across the crypto complex. Ethereum, the second-largest token, dropped 0.9% to $4,277.18 and is down 3.2% for the week. XRP slid 2.2%, bringing weekly losses to 7.6%. Cardano and Solana each fell 2.5% Friday, both lower by more than 7% for the week.
Meme-inspired coins also saw outsized losses: Dogecoin slipped 2.8%, while $TRUMP tumbled 4.6%. The declines underscored the sector’s sensitivity to macroeconomic shifts and its reliance on liquidity flows.
After rallying sharply in 2024 as the Fed pivoted toward easing, cryptocurrencies now face renewed pressure. If Powell signals caution or maintains hawkish language, digital assets could see further downside before stabilizing.