Powell may trigger a massive shake-up in the crypto market! BTC's lifeline revealed, $122,328 becomes the battleground for bulls and bears.
Crypto community beware! Federal Reserve Chairman Powell may personally pour cold water on the September rate cut next week, and this move could trigger severe fluctuations in the Bitcoin (BTC) market. The current BTC price is reported at $123,670, but the technicals have revealed a key lifeline—$122,328 support level. If this price level fails, a short-term pullback may exceed 5%!
Policy shift: Powell may break the rate cut celebration.
On August 13, U.S. Treasury Secretary Yellen publicly pressured the Federal Reserve to cut rates by 50 basis points in September, even threatening to sue Powell for 'slow action'. However, according to the latest news, Powell clearly stated in an internal meeting: 'Rate cuts must be cautious; data does not support aggressive actions.' This statement forms a strong contrast to market mainstream expectations—CME data shows a 93.4% probability of a 25 basis point cut in September, but only a 0.1% probability of a 50 basis point cut!
What’s more concerning is that Fed Vice Chair Bowman released dovish signals on the same day, supporting three rate cuts within the year but emphasizing that 'the first rate cut will not exceed 25 basis points'. If Powell ultimately opts for 'small step rate cuts', BTC, which previously surged on rate cut expectations, may face a short-term pullback.
Technical Alert: $122,328 is the battleground for bulls and bears
From the K-line chart, BTC's current price ($123,670) is approaching the key support level of $122,328. This level has been tested multiple times since July, and if it fails:
Short-term: May trigger programmatic stop-loss orders, testing the psychological level of $120,000;
Medium-term: If the rate cut is less than expected, it may replay the 2019 scenario of 'buying the expectation and selling the fact', with a potential pullback of up to 10%.
However, if the support holds, BTC may still challenge the previous high of $127,000. Technical indicators show that the 5-day moving average has crossed above the 20-day moving average, forming a 'golden cross', but the trading volume has not increased correspondingly, indicating weakened upward momentum.
Historical patterns: Rate cuts ≠ surges; beware of 'profits being fully realized'.
Looking back at history, the impact of Federal Reserve policy on BTC is complex:
2019 Rate Cut Cycle: BTC rose under the expectation of rate cuts but retraced 15% in the short term after the first cut;
2020 Pandemic Rate Cuts + QE: Excess liquidity drives BTC to surge 400%;
2024 Rate Cut Expectations: BTC's maximum increase within the year exceeds 80%, but beware of the risk of 'profit realization'.
The current market environment is similar to 2019: inflation is easing but not out of control, employment data becomes a key variable for rate cuts. If September only sees a 25 basis point cut, it may trigger a 'worse than expected' sell-off.
Bulls vs. Bears: How to respond?
Short-term traders: Keep a close eye on the support level of $122,328; if broken, stop loss; a rebound to $125,000 can be partially cashed out;
Long-term investors: If a 25 basis point cut meets expectations, consider buying on dips with a target of $130,000;
Contract users: Beware of leverage risks, the current volatility index (BVOL) has risen to a three-month high.
Technical personal opinion: Currently, BTC is at a critical juncture, with the support level of $122,328 being the short-term dividing line for bulls and bears. If this price level holds, combined with the 'golden cross' of the 5-day crossing above the 20-day line, it may form a double bottom rebound pattern with a target of $127,000; however, if it breaks down on volume, beware of triggering programmatic stop-loss orders, with the area around $118,000 potentially becoming the next line of defense. Historical patterns show that in the early stages of rate cuts, 'buying the expectation and selling the fact' is common; it is recommended to use $122,328 as a risk control line for the short term and pay attention to directional choices after the September interest rate meeting for the medium term.
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