Bitcoin (BTC) slid below the $113,000 mark on Wednesday, testing a critical support zone as markets brace for Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole Economic Symposium. The remarks are widely expected to shape the Fed’s trajectory on interest rate policy, a key factor influencing both traditional and crypto markets.

A Fragile Market Setup

Bitcoin briefly touched $112,565, its lowest level since August 3, and down from the record high of $124,176 posted earlier this month. The decline triggered an estimated $113 million in liquidated long positions, underscoring heightened volatility ahead of Powell’s appearance.

Retail sentiment has turned sharply negative, with the 12% bearish delta skew marking the most pessimistic outlook in four months. While extreme bearish positioning often sets the stage for short-term rebounds, the current mood reflects widespread uncertainty over monetary policy and global macro conditions.

Macro Pressures Intensify

Beyond Fed policy, markets are contending with new inflationary risks. The U.S. recently imposed 50% tariffs on key aluminum and steel imports, raising concerns about cost pressures that could complicate the Fed’s path toward easing. Combined with fragile global growth signals, these factors amplify investor caution.

Key Technical Levels to Watch

Analysts identify $112,000 as the most important short-term support for Bitcoin. If this level holds through Powell’s speech, BTC could stabilize and potentially attempt a recovery toward the $118,000–$120,000 resistance zone. However, a decisive break below $112K may expose the market to further downside, possibly testing the $110,000 level.

Institutional Support Remains Solid

Despite retail jitters, institutional players continue to expand their Bitcoin exposure. Data shows that over 297 public entities—including listed corporations, funds, and sovereign entities—collectively hold more than 3.67 million BTC, representing around 17% of total supply. This long-term positioning provides a stabilizing backdrop to short-term volatility.

Fed Expectations Shift

The probability of a Fed rate cut in September has narrowed, falling from 94% last week to about 82% today, according to CME’s FedWatch tool. Powell’s remarks in Jackson Hole will be pivotal: dovish signals could reignite Bitcoin’s rally by easing liquidity conditions, while a more cautious tone may prolong market stress.

Bitcoin’s slip toward $112K highlights the nervous state of risk assets ahead of Powell’s speech. The balance between retail bearishness, institutional accumulation, and macroeconomic headwinds suggests a high-stakes week for crypto investors. With sentiment stretched and technical levels in play, Powell’s words could dictate whether BTC rebounds toward fresh highs—or breaks into a deeper correction.