The Bitcoin price edged lower on Thursday, slipping to $112,301 over the past 24 hours. The world’s largest cryptocurrency is now trading about 9% below its record high from last week, as investors await signals from the U.S. Federal Reserve on the direction of monetary policy.

Charts from Cointelegraph Markets Pro showed Bitcoin testing the $114,000 level, a critical price point as the weekly close approached. The token briefly bounced from $112,000 support on Wednesday but faced strong rejection at $114,000, reinforcing concerns of waning bullish momentum.

“Bitcoin is rejecting from $114k resistance on the Daily timeframe,” noted trader and analyst Rekt Capital on X. He stressed that a weekly close relative to this level will be crucial, with potential downside opening toward the $112,000-$110,000 region, which aligns with the 100-day simple moving average. Analysts such as Michael van de Poppe see that zone as a potential “great buy opportunity,” while Daan Crypto Trades cautioned that failure to hold it could send Bitcoin back toward the $100,000 to $90,000 range.

Despite significant gains earlier this year on the back of regulatory progress, crypto markets have cooled recently following hotter-than-expected U.S. inflation data. Over $500 million in crypto long positions were liquidated in the 24 hours. Over-leveraged traders were caught off-guard by the market’s risk-off sentiment, exacerbating the decline as futures data showed a low near $112,800 before stabilizing. This reflects a broader de-risking trend as investors hedge against a potentially hawkish Fed outlook.

Amid Bitcoin’s downward price trajectory, Spot Bitcoin ETF inflows have slowed in August after a strong July, with $1.9 billion in outflows from U.S. Institutional investors are reducing exposure or taking profits amid uncertainty, contributing to selling pressure. This is evident in the Coinbase-Binance spread, which indicates strong U.S. spot market selling.

The broader financial markets are showing caution, with the S&P 500 down 0.3% and the total crypto market cap dropping to $3.84-$3.99 trillion. Mixed economic signals, such as 2.7% CPI inflation, a 0.9% rise in producer prices (above forecasts), and a cooling labor market (4.3% unemployment) are fueling stagflation fears. This is prompting investors to sell risk assets like Bitcoin in favor of cash or bonds.

Bitcoin remained the primary focus of crypto outflows last week. According to the report, investors pulled $756 million from BTC investment products over the past week. Notably, short-Bitcoin products designed to profit from price declines also saw outflows of $19.8 million, the largest since December 2024.

Market watchers agree that Bitcoin’s near-term trajectory hinges on broader macroeconomic signals. Linh Tran, a market analyst at XS.com, highlighted that easing U.S. Treasury yields and a weaker dollar could reignite bullish momentum. However, attention is firmly on Fed Chair Jerome Powell’s speech at the Jackson Hole symposium on Friday. A dovish tone recognizing slower growth risks could lend short-term support to crypto markets, while a hawkish stance to combat inflation might trigger a sharper correction across risk assets.

Interestingly, reports reveal that an activity from a mysterious Bitcoin whale also added intrigue to the market. After years of dormancy, the investor sold $76 million worth of Bitcoin, deposited another 1,000 BTC (valued at $113 million) on decentralized exchange Hyperliquid, and built a $295 million perpetual futures long position on Ether.

Prominent Bitcoin commentator BitQuant, known for accurate past predictions, maintained that BTC will hold above $100,000 during this cycle. “Bitcoin isn’t going below $100K not in this cycle. Doesn’t matter the news, the Fed, or inflation,” he said, dismissing the possibility of the token even “coming close” to the psychological threshold.

Powell’s upcoming remarks are seen as a pivotal moment, with investors weighing whether the Fed will hint at interest-rate cuts, a scenario that typically boosts crypto by making it more attractive than lower-yielding assets like bonds or cash.

His speech could drive Bitcoin lower if he emphasizes persist inflation, downplays labor market weakness, or avoids committing to September rate cuts. Phrases signaling a “higher-for-longer” rate policy, tariff-related caution, or a strong defense of current policy could strengthen the dollar and trigger a risk-off move, potentially pushing Bitcoin toward $108,000-$110,000. Conversely, any dovish hints acknowledging labor market risks could limit the downside and spark a relief rally.