by Vincent Muthee
The Fed has been under immense pressure to cut rates recently. However, while the market was slightly confident regarding a September interest rate cut, the situation has shifted abruptly. As per prediction markets, the odds for a September rate cut have now dropped significantly.
Furthermore, following this news, Bitcoin (BTC) has reacted negatively, dipping to $112,000 level once more despite earlier signs of recovery. Additionally, the crypto market is now all eyes on the Federal Reserves’ Jackson Hole event in Wyoming with sharp focus set on Jerome Powell’s speech which could shift sentiment across the crypto market.
September Fed Rate Cut Odds Dip
Polymarket, a decentralized prediction platform, showed the chance of a September rate cut sliding to 57%. This drop comes as upbeat retail sales data suggest consumer demand remains firm. That data, alongside hawkish Fed remarks, made investors scale back expectations for near-term easing.
JUST IN:
Odds of the Federal Reserve lowering interest rates in September fall to 57%, according to crypto prediction platform Polymarket. pic.twitter.com/OJPVeWodHN
— Watcher.Guru (@WatcherGuru) August 21, 2025
Fed’s policy is significant to both crypto and Wall Street markets. Equities benefit when the cost of borrowing remains low, whereas the dollar and Treasury yields weaken. Cryptocurrencies, on the other hand, which are perceived as risky assets, are quick to react. A stricter policy would restrict liquidity into Bitcoin, Ethereum, and other altcoins, enhancing volatility.
According to analysts, the recent dip in Polymarket’s decline in interest rate cut odds is in line with the general precaution by traders. Most investors are keeping a cautious stance across stocks, bonds, and crypto, relative to the upcoming FOMC meeting in September.
Bitcoin Retreats to $112,000 Level
As uncertainty looms around September rate cut, Bitcoin and the general crypto market has started to feel the heat. As of this writing, data by Coingecko shows that Bitcoin (BTC) is currently at $112,355. With BTC now down by 1.1%, it is heading towards breaching the support at $112,000.
Bitcoin had climbed to $114,000 earlier signifying a sign of recovery. However the loss in optimism for a September rate cut has dampened investor confidence. BTC has thus been moving between $112,300 and $114,500 over the last 24 hours.
Meanwhile, Ethereum – which had climbed to $4,300 level – has also dipped by close to 1% over the same period. Data by Coingecko shows that ETH has dipped to $4,249 as of this writing.
Market Participants Await Jerome Powell’s Jackson Hole Speech
With sentiment across the crypto market now dampening, investors are all glued to the Jackson Hole event set for August 21-23. Fed chair Jerome Powell’s speech during the event could trigger a recovery or a crash for the market.
In particular, a dovish tone could strengthen the US dollar, putting negative pressure on cryptocurrencies like BTC. On the other hand, a hawkish tone could serve as a relief for the crypto market.
For Bitcoin, the $112,000 mark remains the level to watch. Ethereum’s resilience will also be tested if broader risk sentiment worsens with $4,000 set to be a crucial support. Volatility could prevail until the Fed signals a clear path for the US monetary policy.
#blockchain #crypto, #decentralized, #distributed, #ledger
