Bitcoin erases the gains from bets on the Fed's rate cut and falls below 112,000.

Bitcoin erases the gains from bets on interest rate cuts by the US Federal Reserve (Fed), and this Monday it trades with losses that bring it below the 112,000 dollar level.

The cryptocurrency thus leaves behind the strong gains caused by comments from Fed Chairman Jerome Powell at the Jackson Hole symposium last Friday, where he left the door open for a rate cut, which is expected to occur at next month's meeting.

Following his words, Bitcoin surpassed 117,000 dollars. However, this Monday, the price of Bitcoin decreases due to profit-taking by investors.

In recent sessions, Bitcoin "has entered a corrective phase after an impressive rally, retracing to near 112,000 dollars. This movement reflects, in part, the pressure from short-term profit-taking as well as the caution of institutional investors. However, medium and long-term prospects for Bitcoin continue to attract a lot of attention, especially as global monetary policy gradually shifts towards easing," comments Linh Tran, market analyst at XS.com.

He believes that the most notable macroeconomic factor came from the Jackson Hole symposium, where Powell "emphasized that the risks to the labor market are increasing, while inflation remains concerning. He did not commit to an immediate rate cut but left the door open for action if economic data continues to deteriorate."

"This moderation signal boosted expectations that the Fed would initiate a rate-cutting cycle as early as September. Being a scarce and non-yielding asset, Bitcoin usually benefits in a low-interest-rate environment with increased global liquidity," he says.

In addition, Bitcoin has also benefited from its role as an alternative safe haven amid growing geopolitical uncertainty and macroeconomic risks: "As the US dollar loses its edge or US Treasury yields decline, investors tend to invest part of their capital in alternative assets, and Bitcoin is increasingly seen as digital gold. The combination of scarcity, decentralization, and growing adoption has helped Bitcoin consolidate its position in global investment portfolios."

In the short term, he sees that Bitcoin's prospects will largely depend on the upcoming economic data from the US, such as preliminary GDP and core PCE inflation.

"If the data continues to indicate a slowdown in the US economy and a decrease in inflation, the Federal Reserve will have more reasons to initiate a rate-cutting cycle. This scenario would create a high liquidity environment favorable for Bitcoin's recovery. Conversely, if the data turns out unexpectedly positive, investors could maintain a defensive stance, prolonging the short-term correction," he states.

In the medium term, the prospects for Bitcoin "remain positive thanks to the convergence of three factors: US monetary policy nearing a easing cycle, Bitcoin ETFs continuing to serve as a long-term capital entry channel, and the growing recognition of Bitcoin as an alternative safe haven in times of uncertainty. While short-term volatility may persist due to caution, the long-term narrative of Bitcoin is strengthening and it is increasingly likely to play an important role in the emerging global financial system," he explains.

The 110,000-120,000 zone is configured as a structural resistance: there is a high volume of recent purchases that acts as a wall and halts advances. Below, the 60,000-70,000 area represents the main support, backed by a solid base of long-term holders. Between both levels, the 75,000-95,000 range shows low historical supply density, implying that, once inside, the price tends to move quickly to the next congestion area.

In operational terms, this suggests that it is not advisable to chase prices near the maximum. The most efficient strategy is to take advantage of pullbacks toward relevant supports (60,000-70,000 to build positions and reduce exposure as it approaches 110,000-120,000).

However, the ultimate strength signal would come with a sustained weekly close above 120,000, which would open the door to a new price discovery phase. In case of rejection, the most likely scenario would be a return to test lower support levels.