The Bitcoin market is caught in a tug-of-war determined by macro political and economic forces, with $108,000 becoming a battleground for both bulls and bears.
Fed Chairman Powell's unexpected dovish remarks at the Jackson Hole global central bank meeting were like a bombshell dropped into the market. He stated, "The risk balance is changing," emphasizing that the downside risks in the labor market are rising.
Meanwhile, Trump's attempt to fire Fed Governor Lisa Cook, an unprecedented challenge to the Fed's independence, is triggering a perfect storm.
01 Macroeconomic Game: The Tug-of-War Between the White House and the Fed
Trump's intervention in the Fed has reached unprecedented levels. Not only did he attempt to fire Fed Governor Lisa Cook, but he also nominated his own economic advisor to the Fed Board, which is rare in the central bank's century-long history.
The market suddenly realizes that the president who once proclaimed to 'Make America Great Again' is reshaping financial rules in a more aggressive manner.
Powell's dovish remarks at the Jackson Hole annual meeting were widely interpreted as opening the door for a Fed rate cut in September. Traders quickly raised the probability of a rate cut in September to about 90%, causing the Nasdaq and S&P 500 indices to rise in response.
However, Trump seems dissatisfied. Even after Powell's dovish signals, he openly stated that "rate cuts are too late," highlighting the tension between the White House and the Fed.
02 Economic Fundamentals: The Real Driving Force Behind Rate Cuts
Powell's dovish shift is not unfounded. The latest employment data shows that the labor market will still face downward pressure in the future.
When the employment figures' median shifts downward, seasonal adjustments may initially overestimate the data, followed by subsequent downward revisions. The healthcare industry has supported most of the new job positions, while other sectors have generally weakened.
The U.S. economy is facing a complex situation. In the fourth quarter of 2024, U.S. economic growth is expected to plummet to 2.1%, with the unemployment rate rising to 4.2%.
More concerning is that the total U.S. debt exceeds $35 trillion, with interest expenditures for fiscal year 2024 reaching $1.2 trillion, equivalent to burning $3.28 billion daily. If rates are not cut, interest expenditures could soar to $1.4 trillion by 2026, twice the defense budget.
03 Technical Analysis: The Tug-of-War Over Key Support Levels
From a technical analysis perspective, Bitcoin is near a critical support level. Market analysts are closely monitoring the $108,000 key position.
A well-known analyst pointed out: "If it can break and hold above 110,500, then institutional support is successful and doesn't want to continue falling, giving retail investors an opportunity to bottom out. If attempts to break above continue to fail, there’s a chance for an aggressive scenario, bouncing back near 100,000 afterwards."
Another technical analyst stated: "Bitcoin (BTC) is bearish around 112,100-112,600, looking at 111,000-110,500." This perspective represents the view of some in the current market, believing that the rebound is merely a technical adjustment rather than a trend reversal.
Bitcoin Key Level Analysis:
| Position Type | Price Level (USD) | Importance |
|------------|-------------------|----------|
| Resistance Level | 112,300 | Can only rebound after breaking through |
| Support Level | 108,000 | Strong support in the short term |
| Secondary Support | 105,000 | Next support after breaking 108,000 |
04 Market Sentiment: The Alternation of Greed and Fear
The Fear and Greed Index shows that market sentiment is in a complex state. In the last 24 hours, a total of 84,011 people globally were liquidated, with total liquidation amounting to $276 million.
This market volatility creates a typical 'bull market meat grinder' scenario. Investors are both worried about missing potential rebound opportunities and afraid of further market declines leading to greater losses.
A market observer pointed out: "The corrections after Bitcoin and Ethereum broke historical highs are generally for better increases; panic has been created quite effectively, really washing away many people! Most situations will be quickly reversed, and the goal is to open up a more violent market!"
05 Future Outlook: Analysis of Three Possible Scenarios
Scenario One: Dovish Fed Dominates the Market (Probability 50%)
If the Fed successfully cuts rates by 25 basis points in September, and Trump's intervention in the Fed does not escalate further, Bitcoin may find solid bottom support.
In this case, the $108,000 support level will remain strong, and Bitcoin may gradually rebound to $112,300 or even higher.
Scenario Two: Increased Policy Uncertainty (Probability 30%)
If Trump's intervention in the Fed leads to a more serious constitutional crisis or legal disputes, market uncertainty will further intensify.
In this scenario, Bitcoin may test the $105,000 support level and then oscillate within a larger range.
Scenario Three: Resurfacing Inflation Forces Hawks to Shift (Probability 20%)
If tariff costs are significantly transmitted to the consumer end, leading to inflation consistently exceeding expectations, it could affect or even halt the Fed's rate-cutting pace.
In this case, Bitcoin may briefly fall below $105,000 and then look for new bottom support.
In the coming weeks, Bitcoin's price movements will largely depend on the Fed's decisions at the September meeting and Trump's next steps.
Morgan Stanley predicts: "As the Fed's rate cut window gradually approaches, U.S. Treasury yields and the dollar index are expected to both hit new lows for the year this fall." This could provide new upward momentum for Bitcoin.
Regardless of short-term fluctuations, this game intertwined with supreme political power and monetary policy reminds us that the only constant in financial markets is change itself.
Bitcoin is currently quietly hovering at the $108,000 support line, like those huge stone coins on Yap Island, with its value ultimately determined by the narrative we collectively acknowledge.
