On the eve of the Federal Reserve meeting, Bitcoin prices are under pressure. How should investors respond?

6 days before

Summary：Bitcoin (BTC) fell below $113,000 at the Wall Street opening bell, hitting a new 17-day low. Analysts pointed to large orders and "manipulative liquidity" in the market's order book as possible contributors to the decline. Meanwhile, Federal Reserve Chairman Powell's upcoming speech at the Jackson Hole symposium is being viewed by the market as a key signal for future market trends. #Bitcoin #PriceManipulation #FederalRepublic #MarketVolatility #InvestorSentiment

Market Dynamics: BTC falls to a 17-day low

According to TradingView data Bitcoin rebounded briefly after the opening on Wall Street, but then fell below $113,000, hitting a new low since August 3. CoinGlass data shows that the current main support level is $112,300, while the liquidity cluster around $120,000 is still attracting market attention.

Manipulation Controversy and “Whale Spotting”

Keith Alan, co-founder of Material Indicators, warned that large orders in the order book (including a $105,000 "dump protection") may not represent genuine demand but rather a price manipulation tactic (CoinGlass data). He described this as a classic "whale scam" operation that could artificially depress market prices in the short term.

Market commentator TheKingfisher warned that further decline of BTC may have a 10%-30% impact on altcoins, even though the current trend of altcoins is still relatively balanced.

Investor sentiment: Fear and hope coexist

Amidst the market's gloom, analyst Rekt Capital offered a different perspective. He pointed out that during the 2017 and 2021 bull markets, BTC experienced similarly deep pullbacks at the same stage, ultimately leading the market to new all-time highs. This perspective has given some investors a glimmer of confidence.

In terms of emotional temperature, short-term investors are anxious, worried that "whale manipulation" will trigger further selling; while medium- and long-term holders are more likely to choose to wait and see, hoping for a repeat of historical cycles.

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Altcoin market capitalization daily chart. Source: TradingView

Macro Focus: Jackson Hole and the Federal Reserve

The market is generally focused on this week's Jackson Hole Economic Symposium Federal Reserve Chairman Powell will deliver a speech. Last year, he signaled an interest rate cut at the meeting, influencing both crypto and traditional markets. According to analysis by Qatar Pacific Bank, the market currently expects an 80%-95% probability of a 25 basis point rate cut by the FOMC on September 17th, but upcoming macroeconomic data could quickly shift expectations.

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The probability of the Federal Reserve's target interest rate at the September FOMC meeting. Source: CME Group's FedWatch tool

Rational choices in cyclical pullbacks

Amidst the current market volatility, investors should remain rational and cautious. In the short term, it's recommended to control leverage and avoid chasing highs and selling lows during periods of significant volatility to prevent passive liquidation. For medium- to long-term investors, they can refer to historical experience and gradually acquire core assets during pullbacks, but they must set clear stop-loss orders to mitigate risk. Furthermore, be wary of "manipulative liquidity" in the order book and avoid blindly relying on pending order signals.

The decline of Bitcoin not only exposes the shadow of market manipulation, but also reminds investors to remain rational and patient.
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