Bitcoin formed a risky pattern this week as market participants reduced Federal Reserve interest rates.
summary
- After the Hot Producer Prices Index Data, the Bitcoin price was retracted.
- Over the past few days, the multi-layered odds of the Federal Reserve cut have been reduced.
- Technical analysis points to more downsides before ultimately rebounding.
Bitcoin (BTC) retreated from its all-time high from $124,420 to $117,760 in its final check on Saturday, August 16th. Its market capitalization is $2.34 trillion, down from its peak of $2.47 trillion. This decline coincided with a decline in the possibility of a reduction in the Federal Reserve system amid concerns among male dogs.
Speaker Jerome Powell, who has been a major source of disappointment for President Trump, sees a strong labor market as a combination of stable prices. That balance is currently insufficient in the US. There, tariffs enacted on August 7th raise costs as businesses hand over import operations to consumers.
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Bitcoin pressured by Fall Fed Cut odds
BTC prices jumped to a record high of 124,420 on August 14, after the Bureau of Labor Statistics released an encouraged consumer inflation report. The core consumer price index rose to 3.1%, but the headline figures remained unchanged at 2.7%.
Sentiment changed a day after producer price index data surged to 3.6% in July. The report has raised concerns about whether the Fed will cut interest rates in September, as many analysts have expected.
These jitters emerged on Friday, when the US released its latest inflation expectations report. A survey from the University of Michigan showed that inflation expectations for 2026 have skyrocketed to 4.9% and 3.9% over the next five to ten years.
These figures, along with a weak non-farm salary report earlier this month, suggest that the US is heading towards stags characterized by high inflation and slow economic growth.
Today's University of Michigan (UMICH) consumer sentiment data did not reach consensus predictions for the direction of stagflation. Specifically, the consumer confidence index has decreased from 61.7 in July to 58.6 this month (current conditions are expected at 60.9 and 57.2).
-Mohamed A. El-Erian (@Elerianm) August 15, 2025
Therefore, the price of Bitcoin was pulled back as traders reduced the Federal Reserve interest rates. Cross-tier data shows that the probability of a September reduction is still high, but has now dropped from 80% to 70% as of today.
Historically, BTC prices work well when the Federal Reserve is cutting interest rates or when cut expectations are rising.
Bitcoin prices have also been pulled back after FOMC member Austan Goolsbee warned that the banks would need more data to determine their next course of action as the impact of the new tariffs would take longer.
BTC price technology analysis
BTC Price Chart | Source: crypto.news
Daily time frame charts show that Bitcoin prices have been under pressure over the past few days. This pressure began to form as a very bearish double-top pattern at $123,200, with a neckline of $112,000.
Bitcoin also formed a bearish divergence pattern, as evidenced by relative strength index and MACD indicators.
Therefore, BTC prices could be pulled back in the coming days and reopening the uptrend. More profits are confirmed when you exceed the all-time high of $124,420.
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