Bitcoin May Face Short-Term Headwinds If Powell Delivers Cautiously Hawkish Tone, Bitwise Says

• Immediate cause: Fed officials prefer inflation control over near‑term rate cuts.

• Bitcoin fell to roughly $112,300 after Cleveland Fed President Beth Hammack said she would not support a rate cut if deciding tomorrow.

• Market probabilities for a September cut dropped from 92% to 73% this week, increasing downside risk for crypto.

Bitcoin price drop front‑loaded: Fed caution after Jackson Hole remarks weighs on crypto; read analysis and next steps for traders.

What caused the Bitcoin price drop after Jackson Hole?

Bitcoin price drop followed comments from Fed officials emphasizing inflation control and hesitation on near‑term rate cuts. Cleveland Fed President Beth Hammack said she would not support a rate reduction if the decision were made tomorrow, and market odds for a September cut fell sharply, prompting risk‑off selling in crypto.

How did Jerome Powell’s expected “cautiously hawkish” tone influence markets?

Market strategists, including Juan Leon of Bitwise, expected Powell’s Jackson Hole speech to lean “cautiously hawkish,” stressing sticky inflation and uncertainty around tariffs. That tone typically strengthens the dollar and raises real yields, creating a headwind for high‑beta assets such as Bitcoin and altcoins.

What were the short‑term market moves for major cryptocurrencies?

Bitcoin traded around $112,300 after a 1.6% one‑day decline, briefly hitting its lowest level since early July. Ethereum fell about 2.6% to $4,230. Solana and XRP declined roughly 3.5% and 3.4% respectively, reflecting broad risk‑off flows across crypto.

Why are Fed rate expectations so important for crypto?

Cryptocurrency valuations are sensitive to real rates and dollar strength. When the Federal Reserve signals a preference for controlling inflation over easing, bond yields and the dollar tend to rise, reducing liquidity for speculative assets and increasing the cost of capital for risk assets.

Frequently Asked Questions

How much did Bitcoin move after the Fed comments?

Bitcoin fell about 1.6% to trade near $112,300, briefly slipping to its lowest level since early July. The move reflected a broad risk‑off reaction to comments favoring inflation control over immediate rate cuts.

What should crypto investors listen for in Powell’s speech?

Listen for language on inflation persistence, patience versus pivot, and any explicit timing for cuts. Clear hints toward a September cut would be bullish; a hawkish emphasis will likely pressure crypto prices.

Key Takeaways

• Fed caution weighed on crypto: Officials signaled reluctance to cut rates, prompting risk‑off flows.
• Market odds shifted: Probability for a September cut fell sharply, reducing optimism for a near‑term easing boost.
• Traders should prepare: Use hedging, size positions conservatively, and monitor Fed language and real yields.

Conclusion

Bitcoin’s recent decline was driven by renewed Fed caution ahead of Chair Powell’s speech and comments from Cleveland Fed President Beth Hammack emphasizing inflation control. Investors should watch Fed rhetoric closely, manage position sizing, and prioritize liquidity management as markets price evolving rate expectations. COINOTAG will monitor developments and provide updates as official data and speeches are released.