Key Federal Reserve (Fed) data this week, including speeches from Chair Jerome Powell, alongside Friday’s release of the critical PCE inflation figures, are shaping up as important crypto market drivers.
After Monday’s $1.8 billion crypto liquidation shook investor confidence, traders are bracing for fresh signals on the Federal Reserve’s policy stance that could ripple across risk assets.
For Bitcoin, analysts remain sharply divided on whether the world’s largest cryptocurrency is headed for a retracement toward $107K or preparing for a breakout that could send it beyond $130K, with macro uncertainty amplifying every move.
Upcoming Fed Data Signal Caution on Rate Cuts
Monday’s hawkish tone emerged when St. Louis Fed President Alberto Musalem voiced concerns about further rate cuts beyond September’s 25 basis point reduction, citing inflation above the Fed’s 2% target despite a softening labor market.
Atlanta Fed President Bostic reinforced this caution, projecting only one rate cut for 2025 with core inflation at 3.1% and unemployment rising to 4.5% by year-end.
Markets reacted swiftly, with a stronger dollar, rising Treasury yields, and reduced expectations for a November rate cut.
Bitcoin tumbled to $111,800, erasing weekly gains as $1.8 billion in crypto liquidations dragged the total market cap down to $3.89 trillion.
Shawn Young, Chief Analyst at MEXC Research, told Cryptonews that macro catalysts are driving BTC between $107K downside risk and a potential $135K recovery.
Over 407,000 traders were liquidated as Bitcoin fell below $112,000 and Ether dropped under $4,150, marking the largest flush-out of 2025.
Source: CoinglassCrypto equities also declined, with treasury firms like MicroStrategy (MSTR), Metaplanet, and Bitmine falling despite announcing new digital asset purchases.
“This reflects investor skepticism in portfolio expansion until there’s clarity on market direction and macro influence,” Young added.
Analyst Sees Inflection Point as Catalyst for Bitcoin $107K Support or $130K Breakout
The MEXC analyst sees Bitcoin at a crucial inflection point as cycle exhaustion signals emerge.
His analysis shows sustained closes below $112,000 risk pulling BTC toward $107,000 support, a level bulls must defend to prevent deeper retracement to the critical $100,000 mark.
“Recent liquidations may cause short-term pain, but they’re often healthy rebalancing, especially at this scale. Many participants view this pullback as an accumulation opportunity rather than capitulation,” Young noted.
He projects a sustained break above $117,000 will signal bull control, opening price discovery toward $130,000-$135,000 before the current cycle ends.
Source: X/@TradermayneSimilarly, macroeconomic insights shared with Cryptonews from Greg Magadini, Director of Derivatives at Amberdata, focus on the Fed’s preferred inflation measure.
Magadini believes the Fed is more worried about jobs, but overall will continue to monitor both inflation and unemployment.
He added that Powell himself showed considerable uncertainty around the current environment.
“I continue to believe the biggest driver of asset prices, especially Gold and Bitcoin, revolves around the Fed’s independence,” he said.
This independence remains in question, especially as we enter 2026, when a new Fed Chairman will take over.
“Gold and Bitcoin remain in a strong appreciation trend, and I don’t think anything today changes that.“
Moreover, JPMorgan CEO Jamie Dimon has also warned that persistent inflation may prevent further Fed rate cuts, contradicting market expectations for aggressive monetary easing through 2025.
Technical Analysis: Bitcoin Tests Trendline Resistance at $115K-$116K
Looking at the Bitcoin/USDT 4-hour chart, BTC is currently trading around $113,009 and appears to be testing a major descending trendline that has acted as dynamic resistance since the previous highs.
There’s a clear resistance zone around the $120,000-$123,000 level.
The chart shows Bitcoin attempting to break above this long-term bearish trendline, with recent price action forming what appears to be a bullish flag or pennant pattern after the previous rally.
The ascending trendline from the lows provides support underneath, creating a converging triangle formation that typically precedes significant directional moves.
Based on these technical indicators, Bitcoin appears poised for an upward breakout attempt.
If the price can get past the descending trendline and clear the $115,000-$116,000 area with volume, it would likely target the resistance zone around $120,000-$123,000.
A successful break above that level could open the path toward new all-time highs above $130,000.
However, failure to break the descending trendline could result in a retest of lower support levels around $107,000-$108,000, aligning with the previous consolidation zone.
The post Key Fed Data This Friday Adds More Uncertainty After $1.8B Crypto Crash – Bitcoin $107K or $130K? appeared first on Cryptonews.
