After dramatically racing to fresh all-time highs above $124,000, Bitcoin has started to slide downwards — shedding $10,000 in the space of a week.
Activtrades market analyst Carolane de Palmas has told Cryptonews the dip is “partly a function of profit-taking,” with short-term investors locking in gains.
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While she doesn’t believe demand for BTC is weakening, with whales continuing to hoover up coins, she believes many traders are adopting a “wait-and-see” approach as geopolitical tensions and a quiet summer period create challenging conditions.
“This is typical in periods of global tension — whether it’s tariffs, monetary policy shifts, or political headlines, investors tend to trim exposure to volatile assets. That said, Bitcoin has proven time and again that momentum can return very quickly.”
Indeed, monetary policy will be front and center of attention this week as the Federal Reserve holds its annual summit in Jackson Hole, Wyoming — with traders waiting with bated breath for hints from Chair Jerome Powell that interest rates will finally be cut.
De Palmas believes that, if the Fed begins to slash the cost of borrowing at pace, “Bitcoin could just as easily climb back above $124,000.”
“The symbolism of Jackson Hole matters. This is where Powell sets the tone for policy direction, and any hint that rate cuts are still firmly on the table could restore confidence in the crypto rally. On the flipside, if the Fed appears hesitant because of tariff-driven inflation concerns, Bitcoin could remain trapped in consolidation until a clearer macro catalyst emerges. In the next quarter, Bitcoin’s path will be closely tied to Fed expectations.”
Policymakers at the Fed have been keeping a very close eye on inflation, with the latest U.S. Producer Price Index rising at its fastest level in three years as businesses pass on the cost of tariffs to consumers already feeling the pinch.
And beyond interest rates, de Palmas warns there’s another issue eating away at traders: whether the Federal Reserve’s independence is under threat.
“Donald Trump has openly criticized Powell in the last few months, even floating the idea of replacing him before his term ends next year. That level of political interference is highly unusual for the Fed, and it unsettles traditional markets.”
Interestingly, de Palmas believes this could actually be a net positive for Bitcoin — “reinforcing its original appeal as an independent, non-sovereign asset that operates outside the influence of any government or central bank.”
And should Trump nominate a yes man who is willing to dramatically lower interest rates, weakening the U.S. dollar further in the process, BTC could secure another short-term boost as a result.
In the short-term, the analyst told Cryptonews that any hint from Powell that interest rates may remain elevated for longer could lead to “markets repricing aggressively” — reducing the crypto market’s momentum well into the fall.
“While Bitcoin is often framed as ‘digital gold,’ its short-term performance is still highly sensitive to liquidity cycles. Traders need to recognize that Fed policy directly shapes dollar liquidity, and by extension, influences the flows into and out of Bitcoin.”
Data from SoSoValue shows that it’s been a challenging few days for Bitcoin ETFs, with outflows jumping to $523 million on Tuesday. That’s the biggest drawdown since August 1.
Nonetheless, the likes of Anthony Scaramucci remain “cautiously optimistic” that BTC has further room to run — setting a target of between $180,000 and $200,000 during an interview with CNBC from the Wyoming Blockchain Symposium.
“There’s a consolidation story happening, there’s a change of ownership story happening, but I think we’re going higher. Just look at the math — there’s just way more demand than issued supply of Bitcoin, or existing overall supply in the marketplace. We still maintain our price target … and I think that’s a cautious price target, there are people who are way above those levels.”
Explaining the rationale behind this target, Scaramucci pointed to the likes of Strategy and Metaplanet who are buying BTC every week in bulk — with purchases that far exceed the 450 coins entering the marketplace on a daily basis following last year’s halving event. The likes of VanEck also believe Bitcoin will reach $180,000 by the year end.
For now, there’s one thing that bulls and bears alike can agree on: the coming days in Jackson Hole are going to prove consequential for the markets.
The post Expert: Bitcoin Can Quickly Return to $124K — Here’s How appeared first on Cryptonews.
