Bitcoin (COIN:BTCUSD) slipped to $112,943 on Friday, continuing a week-long downtrend as doubts over U.S. interest rate cuts weighed on risk sentiment ahead of Federal Reserve Chair Jerome Powell’s address. The cryptocurrency has lost nearly 4% this week, following a wave of profit-taking after mid-August record highs. Other major cryptocurrencies also fell, signaling broader weekly losses in the digital asset market.
Reports that China is considering issuing state-backed, yuan-denominated stablecoins did little to lift sentiment, as the country’s crypto trading ban from 2021 still casts a shadow over such developments.
Rate cut uncertainty pressures crypto
Investor expectations for a September Fed rate cut have declined sharply. CME FedWatch data shows just a 73% chance of a 25-basis-point cut, down from over 90% last week. Minutes from the Fed’s late-July meeting revealed that most policymakers favor keeping rates steady for now.
Powell, speaking later at the Jackson Hole Symposium, is expected to provide clues on the central bank’s future moves. He has emphasized the uncertainty posed by trade tariffs imposed by President Trump, while stronger-than-expected U.S. economic data, including August PMI readings, has further tempered rate-cut speculation.
Persistent higher rates generally create headwinds for speculative assets like cryptocurrencies, as borrowing costs rise and risk appetite declines. Bitcoin’s recent performance reflects this dynamic, echoing losses during the Fed’s 2022-2023 rate hike cycle and the rebound seen after easing in 2024.
Altcoins slide amid risk-off sentiment
Other digital assets followed Bitcoin lower. Ether (ETH) dropped 0.9% to $4,277, losing 3.2% for the week. XRP fell 2.2%, heading for a weekly 7.6% decline. Cardano (ADA) and Solana (SOL) each shed 2.5%, recording weekly losses exceeding 7%. Meme coins also retreated, with Dogecoin (DOGE) down 2.8% and $TRUMP falling 4.6%.
Traders are now focused on Powell’s speech, seeking signals on interest rates and macroeconomic policy, which could dictate near-term direction for both Bitcoin and broader crypto markets.
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