Macroeconomic Catalyst: Powell Sparks Bitcoin Rebound
Bitcoin (BTC-USD) surged above 117,300 after Federal Reserve Chair Jerome Powell delivered a dovish signal at the Jackson Hole symposium. Powell emphasized that the shifting balance of risks could justify a rate cut as soon as September, which caused rate cut odds to jump from 73% to nearly 90% in one trading day according to CME FedWatch. The crypto market reacted instantly with Bitcoin climbing 3.4% to 116,000, Ethereum (ETH-USD) soaring 12% to 4,810, XRP (XRP-USD) adding 5% to trade at 3.02, and Solana (SOL-USD) advancing 8% to 206. The rebound pushed the total crypto market capitalization above 4 trillion dollars, regaining more than 200 billion in value within 24 hours.
Resistance at 117K Blocks Bitcoin’s Advance
The rally quickly faded as Bitcoin failed to hold its ground. Over the weekend BTC-USD traded around 114,600 within a narrow band of 114,575 to 115,549, unable to break through the heavy ceiling at 117,000. This barrier coincides with a double top near 124,000 recorded earlier this month, which confirmed the technical pressure on the upside. Indicators underline this fragility as the Relative Strength Index hovers near 47, the MACD remains negative at minus 365, the Commodity Channel Index sits at minus 62, and the Average Directional Index reflects only 16, all of which highlight the absence of trend conviction. Price structure continues inside a descending channel since mid August, and the rebound from 111,658 to 117,421 increasingly resembles a short squeeze rather than genuine accumulation.
Institutional Flows Slow as Whales Take Profits
On chain and fund data reveal a weakening demand profile. Institutional buying fell sharply, dropping from 174,000 BTC in July to just 59,000 BTC in the latest tally. Spot Bitcoin ETFs, once a primary driver of demand, logged only 11,000 BTC in 30 day net inflows, the lowest level since April. Whales have been realizing profits aggressively, locking in 74 billion dollars since July 4, including a single day profit realization of 9 billion and another 2 billion on August 16. Even Strategy Inc, the largest corporate Bitcoin holder, has scaled back its pace of accumulation from 171,000 BTC in November 2024 to just 27,000 BTC in the past 30 days. This profit taking and decline in ETF flows have coincided with Bitcoin’s retreat from its 124,000 summer peak and remain a key factor suppressing upside momentum.
Bitcoin Network Fees Collapse to 2011 Lows
Even as price holds above 114,000, Bitcoin’s fee revenue has collapsed to levels unseen in more than a decade. Average daily transaction fees have fallen to just 3.5 BTC per day on a 14 day average, the lowest reading since late 2011. In contrast with prior bull markets such as 2017 and 2021 when network congestion caused fees to spike dramatically, the current cycle reflects improved efficiency from SegWit and Lightning adoption, combined with declining speculative usage as NFTs and DeFi activity migrate to Ethereum and Solana. For miners this means an increased reliance on block subsidies at a time when halving events continue to reduce rewards, while for users it translates into cheaper transfers but also signals weaker transaction-driven demand across the network.
Altcoin Rotation Drains Bitcoin Dominance
Bitcoin dominance has slid toward 59 percent as capital shifts aggressively into altcoins. Institutional flows illustrate this clearly with crypto funds attracting 3.75 billion dollars last week, of which Ethereum captured a stunning 77 percent while Bitcoin attracted only 552 million. Whales have also shifted positioning by moving long dormant Bitcoin holdings into Ether, aligning with Ethereum’s breakout above 4,800 and traders now targeting 5,200 to 5,500. This rotation is a classic late cycle phenomenon where Bitcoin consolidates after leading the rally, while higher beta altcoins absorb speculative flows and deliver outsized percentage gains.
Critical Technical Levels for BTC-USD
The near term picture is framed by support and resistance zones that are shaping Bitcoin’s trajectory. The 114,000 level stands as immediate support and is being tested frequently. A deeper cushion sits at 111,000, which was the bounce point in July and also aligns with the realized price of short term holders. Further down, the structural floor is positioned near 105,000 at the long term ascending trendline, a critical line that defines the integrity of this bull cycle. On the upside, 117,000 is the pivotal resistance that must be reclaimed to signal strength. Should that break, 121,000 emerges as the next liquidity target, followed by 124,500 to 127,500 within the upper Fibonacci zone, which could come into play if momentum rebuilds.
Verdict on Bitcoin (BTC-USD): Hold with Bearish Near-Term Bias
The balance of evidence points to caution in the short run. Institutional demand has cooled, whales are locking in profits, and the fee market shows the weakest activity since 2011, all of which weigh on momentum. Bitcoin remains vulnerable below 117,000 with downside risk toward 111,000 if the 114,000 level breaks. Yet longer term dynamics remain intact with the 200 day simple moving average near 100,800 providing a firm base and institutional adoption via ETFs still supportive even if at a reduced pace. In the immediate horizon the recommendation is to hold with a bearish bias, expecting potential tests of 111,000. In the medium term over the next one to three months cautious accumulation is warranted if Bitcoin sustains levels above 110,000 with any breakout above 117,000 opening the door toward 121,000 to 127,000. In the long horizon of six to twelve months the structural bull cycle remains intact, with potential to reach 145,000 if macro catalysts such as Federal Reserve rate cuts align with institutional inflows.
