Powell could trigger a major shock in the crypto space! BTC's lifeline exposed, $122,328 becomes the battleground for bulls and bears.
Crypto market beware! Federal Reserve Chairman Powell may personally 'douse cold water' on the September rate cut next week, and this action could trigger severe volatility in the Bitcoin (BTC) market. Currently, BTC is priced at $123,670, but the technicals have exposed a critical lifeline—$122,328 support level, if this level is lost, a short-term pullback of over 5% may occur!
Policy turnaround: Powell may break the rate cut frenzy.
On August 13, U.S. Treasury Secretary Basant publicly pressured the Federal Reserve, demanding a 50 basis point rate cut 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, and the data does not support aggressive actions.' This statement sharply contrasts with mainstream market expectations—CME data shows a 93.4% probability of a 25 basis point rate cut in September, but only a 0.1% probability of a 50 basis point cut!
What is even more concerning is that Federal Reserve Vice Chairman Bowman released dovish signals on the same day, supporting three rate cuts within the year, but emphasized that 'the first rate cut will not exceed 25 basis points.' If Powell ultimately chooses 'small step rate cuts', BTC, which surged due to expectations of rate cuts, may face a short-term pullback.
Technical alert: $122,328 has become the critical point for bulls and bears.
From the K-line chart, BTC's current price ($123,670) is approaching the critical support level of $122,328. This price level is the bottom area tested multiple times since July; if it breaks:
Short term: May trigger programmatic stop-loss orders, testing the psychological level of $120,000;
Medium term: If the rate cut does not meet expectations, it may replay the 'buy the expectation, sell the fact' scenario seen after the 2019 rate cuts, with a pullback of up to 10%.
However, if the support holds, BTC is still expected to 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 trading volume has not increased synchronously, suggesting weakening upward momentum.
Historical pattern: Rate cuts ≠ surges, beware of 'good news fully priced in'.
Looking back at history, the Federal Reserve's policy has a complex impact on BTC:
2019 rate cut cycle: BTC rose under the expectation of rate cuts but pulled back 15% after the first rate cut;
2020 pandemic rate cuts + QE: Excess liquidity drove BTC to surge by 400%;
2024 rate cut expectations: BTC's largest increase within the year exceeds 80%, but beware of 'profit-taking' risks.
The current market environment is similar to 2019: inflation is easing but not out of control, and employment data is the key variable for rate cuts. If only a 25 basis point cut occurs in September, it may trigger a sell-off due to 'not meeting expectations'.
Bull and bear showdown: How to respond?
Short-term traders: Keep a close eye on the $122,328 support level; if it breaks, stop loss, and partial profit-taking can be done on a rebound to $125,000;
Long-term investors: If a 25 basis point cut meets expectations, it can be a good opportunity to buy on dips, targeting $130,000;
Contract users: Beware of leverage risks, the current volatility index (BVOL) has risen to a three-month high.
Technical analysis personal opinion: Currently, BTC is at a critical juncture, with the $122,328 support level being a short-term dividing line between bulls and bears. If this price level holds, combined with the 'golden cross' of the 5-day moving average crossing above the 20-day moving average, it may form a double bottom rebound pattern, targeting $127,000; however, if it breaks down with increased volume, be cautious of triggering programmatic stop-loss orders, and the $118,000 area may become the next line of defense. Historical patterns show that in the early stages of a rate cut, 'buy the expectation, sell the fact' scenarios are common; it is advised to use $122,328 as a risk control line for short positions and to watch for directional choices after the September policy meeting for medium-term positions.
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