While many investors still believe that each Bitcoin cycle is tied to the four-year halving milestone, economist and market analyst Alex Krüger argues that 'the era of halving cycles has ended.' According to him, the factor determining the next price increase does not lie in the old rule but depends on personnel politics in Washington, particularly who will replace Jerome Powell as Chair of the Federal Reserve.

Monetary Policy – A New Catalyst for Bitcoin

In a post on X on August 18, Krüger affirmed:

"I am confident that this cycle is not over because I expect the change in Fed leadership to bring about significant monetary easing – something that the market has not yet reflected. Only when President Trump announces a replacement candidate for Powell will this scenario begin to be priced into the market."

This means that instead of waiting for the halving, investors should focus on the direction of US monetary policy – a factor that has repeatedly influenced the flow of money in the risk asset market.

Krüger reiterates that the previous cycle ended not because Bitcoin 'self-weakened' but because the Fed began tightening aggressively from January 2022, pulling down global liquidity and halting the market's upward momentum.

The Race for the Fed Chair

Jerome Powell's four-year term will end on May 15, 2026, but recent signals indicate that the White House may soon announce a list of replacement candidates. Some prominent names mentioned by the US media include:

  • Kevin Warsh – former Fed Governor

  • Kevin Hassett – Director of the National Economic Council (NEC)

The key point is: a candidate with a 'dovish' inclination will be expected by the market to open a period of greater liquidity, thereby extending Bitcoin's upward trend. Conversely, if the new personnel has a 'hawkish' stance, the growth cycle could be quickly halted.

Key Short-Term Policy Milestones

In the short term, all eyes are still on the Jackson Hole conference (August 21–23) – where Powell will give his final speech as Fed Chair. Krüger predicts that Powell is likely to choose a somewhat 'hawkish' tone to maintain control ahead of the September FOMC meeting, even if the market expects the Fed to cut interest rates.

In the near term, a series of important macro data such as PCE, NFP, CPI, PPI will continue to guide policy expectations and asset price volatility, including Bitcoin.

Technical Analysis and the Derivatives Market

After setting a new peak in mid-July and last week, Bitcoin has retreated to test support levels:

  • Near support: $112,000

  • Important psychological level: $100,000

  • Resistance: $122,000 – $124,000

Krüger notes that Bitcoin currently finds it difficult to rise without a clear catalyst, while the derivatives market also reflects cautious sentiment:

  • Implied volatility is at its lowest in two years.

  • Open interest on organized exchanges has decreased compared to July.

  • Futures basis is weakening, indicating that leveraged capital is withdrawing.

  • The options market is increasing demand for put options.

This means that the market is in a phase of 'slow climb, low volatility', waiting for a policy push or macro news to shape a new trend.

Conclusion: The Cycle Does Not Die because of High Prices but Because of Policy

Krüger emphasizes:

"Bull markets do not end because of valuations or because they are too hot; they only end when a major shock occurs. And that shock in 2025 could very well be the name for the Fed Chair position."

Given the current context, US politics and Fed personnel are becoming key variables shaping the Bitcoin cycle – a factor that investors cannot overlook if they want to catch the next big wave.