The Hidden Catalyst That Could Reverse Bitcoin’s Slide
Actionable Market Insights
Why this report matters
Bitcoin just broke below $112,000, but the story behind the move runs deeper than most traders realize. A stealth trigger, missed by many, may soon shift the macro backdrop in ways that matter for crypto. While markets focus on labor data and rate cuts, another force is quietly building pressure in the background. Key technical levels are converging with overlooked macro dynamics, offering a potential setup for those who know where to look. We’ve mapped this range before, and what’s coming next could mirror some of Bitcoin’s most explosive recoveries.
Bitcoin could be at a major inflection point soon
Main argument
Bitcoin has now corrected in line with typical August seasonality, coinciding with downward revisions to U.S. labor market data, suggesting the economy may be on shakier ground than Fed Chair Powell and many investors had assumed. The current setup closely mirrors last year’s dynamics, when the Fed responded to early signs of labor market softness with a surprise 50 basis point rate cut in September. That weakness proved temporary, and labor data rebounded sharply, triggering a strong year-end rally.
The key takeaway is that the Fed appeared to treat weakness in risk assets, particularly equities, as a leading indicator for broader economic conditions, ultimately allowing market stress to dictate policy. If, as we've maintained since early this year, markets are now correctly pricing in two rate cuts with the first likely in September, we would expect further declines in risk assets first followed by a sharp rebound once a cut becomes certain and is publicly validated by Fed officials. Are we on the verge of the next major move?