Bitcoin Price Forecast: $112K Support Tested Ahead of Powell’s Jackson Hole Remarks

Bitcoin (BTC-USD) Price Forecast: $112K Support Faces Critical Test Ahead of Powell’s Jackson Hole Speech

Bitcoin is trapped in one of its most crucial phases of the summer, sliding from an all-time high of $124,544 on August 14 to trade near $113,000 today. The drop of nearly 9.5% has shifted market tone from euphoria to caution, with the coin hovering directly above the $112,000 neckline that has become the key support line in this selloff. A clean break below this level exposes $108,000 as the first target, with $105,150 as a deeper extension. Traders know that losing $112K would not just be a technical breach — it would trigger liquidations across futures markets and accelerate bearish momentum.

Powell’s Jackson Hole Speech: The Deciding Factor for Bitcoin

This week’s most important event is Federal Reserve Chair Jerome Powell’s speech at Jackson Hole, scheduled for Friday. Historically, this annual central banking symposium has produced market-shaking announcements — last year’s hawkish remarks reinforced rate hikes and dragged equities and crypto lower. Powell faces a similar crossroad now: inflation data has come in firmer, labor markets remain resilient, and bond markets have already adjusted, with odds of a September rate cut now down to 25 bps from 100 bps earlier this month.

If Powell adopts a hawkish stance, signaling that inflation remains sticky and rate cuts will be slower or shallower, Bitcoin could break decisively below $112,000, sending it to $110,000 and possibly $108,000 in short order. Risk assets, already under pressure from ETF outflows, would see further strain as the dollar strengthens. On the other hand, if Powell leans dovish and acknowledges risks to growth, markets could reverse sharply. In that scenario, Bitcoin could reclaim $115,870 (50-day moving average), push above $116,150, and re-test $118,500–$120,900 within days. Powell’s tone will dictate whether Bitcoin finds a new floor or stages an immediate rebound.

ETF Flows Add to Downside Pressure

While macro policy is the driver, ETF flows remain a significant factor. Spot Bitcoin ETFs saw $523 million in outflows on Tuesday, the third straight day of redemptions. Fidelity’s FBTC and BlackRock’s IBIT were hit hardest. Meanwhile, Ethereum ETFs have posted inflows, signaling that institutions are rotating part of their allocation away from Bitcoin. This divergence matters: if Powell is hawkish, it will validate the current rotation away from BTC, while a dovish Powell could trigger a sharp return of institutional capital.

Technical Landscape: Key Levels to Watch

• Immediate support: $112,000 — the neckline of the breakdown.

• Secondary support: $108,000, followed by $105,150 as a major liquidity pool.

• Resistance: $115,870 (50-day MA), $116,150 (short-term breakout line).

• Bull target: $120,900, then $124,450, the prior record high.

The RSI at 41 shows weakness but no oversold conditions yet, meaning sellers could still push prices lower before buyers regain control. The MACD is firmly bearish, while negative funding rates reveal leveraged longs being flushed out. Importantly, open interest remains near 300,000 BTC, setting up the potential for a volatility spike when Powell speaks.

Historical Precedent for Mid-Cycle Corrections

Bitcoin’s history suggests that even steep drops don’t derail the broader cycle. In 2017, BTC fell 36% mid-bull run and then rallied to fresh highs within three months. In 2021, a 23% retracement cleared leverage before another all-time high. If this cycle follows a similar path, a dip to the $95,000–$100,000 zone would still leave the long-term uptrend intact. The difference now is that macro policy — specifically Powell’s rate guidance — carries more weight than ever due to institutional adoption through ETFs.

Sentiment and On-Chain Data

The Fear & Greed Index has slid to 44 (fear), while Santiment notes the most negative retail sentiment since June 22. This aligns with ETF outflows but contrasts with long-term accumulation. Institutional holders such as MicroStrategy (MSTR) and Metaplanet (3356.T) continue adding Bitcoin to balance sheets, showing conviction despite short-term volatility. That divergence between retail fear and institutional accumulation has historically marked strong entry zones.

Price Forecast and Powell-Centric Scenarios

• Bearish Powell scenario: BTC breaks $112K, accelerates to $110K–$108K, testing deeper liquidity near $105,150.

• Neutral Powell scenario: Bitcoin consolidates between $112K–$116K, waiting for September FOMC clarity.

• Dovish Powell scenario: BTC recovers above $115,870, rallies toward $118,500–$120,900, and re-challenges $124,450.

The market’s fate over the next two weeks is tightly bound to Powell’s words at Jackson Hole. Traders are treating $112,000 as the final line before capitulation, while $116K and above will only be reclaimed if Powell signals confidence that the Fed can ease policy sooner.

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