Bitcoin experienced a significant breakout, reaching $117,000 and liquidating a substantial number of short positions, paving the way for a potential retest of all-time highs. This surge followed hints from the Federal Reserve about a possible shift in monetary policy during the Jackson Hole Symposium.
Market Response to Fed's Signals
Bitcoin's price jumped over 4% to an intraday high of $117,300 on Bitstamp, rebounding from a six-week low of $111,600. This rally was triggered by Federal Reserve Chair Jerome Powell's suggestion of a potential interest rate cut in September. Powell's tone at Jackson Hole indicated a subtle but critical shift, acknowledging that current policy might be restrictive. Traders quickly priced in a high probability of a 25 bps September rate cut, diminishing the appeal of U.S. Treasury yields relative to digital assets.
Liquidation of Short Positions
The sudden market recovery led to the liquidation of a significant number of traders who were betting against Bitcoin. Data from CoinGlass revealed that $379.88 million in short positions were liquidated, with Ether accounting for a large portion of that total. Bitcoin followed with $56.4 million in short liquidations. Across the board, a total of $629.48 million was wiped out of the market in both short and long positions, impacting 150,217 traders. The Bitcoin liquidation heatmap showed the price clearing away liquidity above $117,000, with substantial ask orders sitting between $117,000 and $118,000.
Analyst Perspectives
Analysts suggest that the Bitcoin "uptrend is back". Michael van de Poppe, Founder of MN Capital, noted that the sweep below $112,000 provided traders with a favorable entry position. He pointed out the immediate massive move upward on Bitcoin after the sweep, reinforcing the idea that the uptrend has resumed.
However, some analysts remain cautiously optimistic. If Bitcoin fails to break above $116,800, it could signal the start of a bear market. The market's focus remains on macroeconomic developments, particularly the Federal Reserve's Jackson Hole symposium, for further insights into monetary policy.
Technical Analysis and Future Outlook
Bitcoin technical analysis points to a critical juncture at $119,000 support. A successful defense of this level could trigger a rally toward the immediate resistance at $124,474. The ultimate bullish Bitcoin forecast targets $132,815, potentially establishing new all-time highs.
However, a failure to hold the $112,000 level could expose downside targets between $108,000–$110,000. The RSI sits at 41, and the MACD line remains below the signal line, confirming ongoing bearish pressure.
Despite short-term bearish signals, whale wallets have grown increasingly active, indicating strong underlying demand. As Bitcoin trades above all major EMAs, including 20-day, 50-day, 100-day, and 200-day support levels, it is positioned for a potential breakout toward $120K resistance.
Overall Sentiment
The overall sentiment in the Bitcoin market is mixed, with some analysts predicting a retest of all-time highs and others warning of potential downside risks. The Federal Reserve's monetary policy decisions and macroeconomic conditions will likely play a crucial role in determining Bitcoin's future trajectory.
