Bitcoin held a crucial line of support around 112,500 as markets brace for Federal Reserve Chair Jerome Powell’s Jackson Hole speech later today. Trading near 115,200, BTC has managed to stay above the key level that also aligns with the 61.8% Fibonacci retracement of its April-to-July rally, but the rebound has been muted as investors position cautiously ahead of the event.
In the past month, the market has bounced from this same Fibonacci level, and a similar move could unfold if Powell signals a more dovish stance, potentially hinting at faster and deeper rate cuts. The market currently prices in a 25 basis point cut in September, followed by another cut before year-end.
Derivatives activity shows a mixed picture. Global futures open interest in BTC and ETH rose about 1% over the past 24 hours, suggesting capital flowing into positions as prices edge lower. Some of this activity may comprise hedges against potential hawkish comments from Powell. Meanwhile, open interest declined for SOL, DOGE, LINK, XRP and ADA, signaling capital leaving those names, even as smaller, less-followed coins like MAT, ULTIMA and LUMIA posted notable OI gains.
Overall speculative activity appears to have cooled, with volumes across major tokens excluding BTC down 20% or more as traders wait for Powell before making further moves. On the CME, standard ether futures OI remains elevated near 2 million ETH, while BTC’s OI sits well below July’s highs, indicating a quieter bid for most institutional players.
Options activity shows renewed interest. ETH option open interest rose to about $1 billion, the highest this year, while BTC option OI jumped to around $4.44 billion, the highest since May. Deribit-listed BTC options imply about a 2% price swing in the next 24 hours, with 30-day vol averaging around 1.18%. Puts continue to trade at a premium to calls for BTC, signaling lingering downside concern, a pattern also seen in related Nasdaq-linked ETFs. OTC block flows on Paradigm were mixed, featuring a mix of outright calls, put spreads and risk-reversal strategies.
What to watch next
– If Powell adopts a dovish tone, BTC and ETH could stage a stronger rebound, supported by improving hedging dynamics and potential upside in rate-cut expectations.
– Conversely, hawkish cues could magnify downside pressure, given the persistent put premium and elevated options positioning.
– The psychological mark of 112,500 remains a critical guardrail, and a clear break below could invite further selling, while a sustained move above the current zone could pave the way for a short-term rally.
Summary
Bitcoin is hovering above a key support level near 112,500 as traders await Powell’s Jackson Hole remarks. The awaited speech could tip the balance toward a bullish relief rally if it signals a dovish Fed path, or add to downside pressure if it turns hawkish. Derivatives data indicate cautious positioning, with rising futures open interest and elevated BTC option OI, underscoring a climate of vigilance ahead of the event.
Positive note
The market’s reaction to Powell’s guidance could unlock short-term volatility and liquidity as traders recalibrate expectations for monetary policy. If the narrative tilts dovishly, BTC and ETH may gain traction, supported by a combination of hedging activity and renewed investor interest.