Bitcoin (COIN:BTCUSD) extended its recent declines on Friday, hitting $112,943.4 by 05:29 GMT, as investor caution intensified ahead of Federal Reserve Chair Jerome Powell’s highly anticipated speech. The world’s largest cryptocurrency is down nearly 4% this week, pressured by profit-taking after reaching all-time highs earlier in August. Other major digital assets also retreated, pointing to broader weekly losses across the crypto market.
Attempts to support crypto sentiment fell flat, despite reports that China may explore state-backed, yuan-denominated stablecoins to encourage yuan trading—a market the country effectively shut down in 2021.
Rate cut bets fade as Powell speech approaches
Bitcoin’s slide reflects waning expectations for U.S. interest rate cuts in September. CME FedWatch data showed the probability of a 25-basis-point cut now stands at 73.1%, down sharply from more than 90% last week. The minutes from the Federal Reserve’s late-July meeting indicated that most policymakers favor holding rates steady in the near term.
Powell, speaking later at the Jackson Hole Symposium, has remained cautious about signaling future rate cuts, noting uncertainties surrounding the inflationary effects of President Donald Trump’s trade tariffs. Positive U.S. economic data, including stronger-than-expected August purchasing managers index readings, further dampened rate-cut expectations.
Extended periods of higher interest rates generally weigh on speculative assets such as cryptocurrencies, as tighter monetary conditions reduce liquidity and make riskier investments less attractive. Bitcoin previously faced steep declines during the Fed’s rate hikes in 2022 and 2023, but rallied sharply when easing began in 2024.
Altcoins follow Bitcoin lower amid profit-taking
Other cryptocurrencies mirrored Bitcoin’s slide. Ether (ETH) fell 0.9% to $4,277.18, down 3.2% on the week, while XRP declined 2.2%, tracking a 7.6% weekly drop. Cardano (ADA) and Solana (SOL) each shed 2.5%, posting weekly losses above 7%. Meme coins were hit as well, with Dogecoin (DOGE) down 2.8% and $TRUMP tumbling 4.6%.
Market participants now await Powell’s address for fresh guidance on U.S. monetary policy, which could set the tone for crypto and broader risk assets in the near term.
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