Bitcoin Slides Below Crucial Support amid Jackson Hole Jitters

While XRP extended losses on spot XRP ETF disappointment, Bitcoin (BTC) closed below the key $115,000 support level for the first time since August 5. Recent inflation-linked US economic data has fueled uncertainty about the Fed’s policy stance ahead of the Jackson Hole Symposium.

Fed Chair Powell will speak on Friday, August 22. The Fed Chair may signal a delay to interest rate cuts to continue assessing the impact of tariffs on import prices and inflation.

Delays to Fed rate cuts would keep borrowing costs elevated and strengthen the US dollar, impacting BTC’s store of value position. On the other hand, support for multiple Fed rate cuts could soften the US dollar, reduce borrowing costs, and boost demand for BTC and other risk assets.

US Crypto-Spot ETF Market Extends Outflow Streak

Market concerns about Chair Powell’s stance on monetary policy also impacted spot BTC ETF flows. According to Farside Investors, the US BTC-spot ETF market reported total net outflows of $121.7 million on August 18. Outflows accelerated on August 19. Key flows included:

• Fidelity Wise Origin Bitcoin Fund (FBTC) saw net outflows of $246.9 million.
• Grayscale Bitcoin Trust (GBTC) reported net outflows of $115.5 million.
• Bitwise Bitcoin ETF (BITB) had net outflows of $86.8 million.
• ARK 21Shares Bitcoin ETF (ARKB) reported net outflows of $63.3 million.

With BlackRock (BLK) iShares Bitcoin Trust (IBIT) flow data pending, total US BTC-spot ETF outflows reached $523.3 million, potentially extending the outflow streak to three sessions. BTC flow trends remain crucial for the supply-demand balance and the token’s price trajectory.

BTC Price Outlook: The Fed and Spot ETFs in Focus

Bitcoin slid 2.94% on Tuesday, August 19, following the previous day’s 1.03% loss, closing at $112,881.

Looking ahead, several key events will dictate the near-term price trajectory. These include:

• Fed monetary policy stance: FOMC Meeting Minutes, Fed commentary, the Jackson Hole Symposium, and Fed Chair Powell’s speech.
• Services PMI and US Jobless Claims.
• Legislative developments on Capitol Hill.
• BTC-spot ETF flows.

Potential scenarios:

• Bearish Scenario: Legislative roadblocks, increasing US stagflation risks, hawkish Fed rhetoric, and ETF outflows. A combination of these may drag BTC to $110,000, exposing the psychological $100,000 support level.
• Bullish Scenario: Bipartisan support for the CLARITY Act, easing US recession risks, dovish Fed signals, and ETF inflows. In this case, BTC could target the record high of $123,731.