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BTC Drops 10% but Recovers Quickly—Crypto Markets Brace for Fed Signals
Crypto market sentiment has returned to neutral territory after Bitcoin’s sharp drop to $112,000 earlier this week briefly pushed the Fear & Greed Index into the “fear” zone.
Bitcoin Rebounds After 10% Correction
Bitcoin (BTC) hit $112,350 on Coinbase late Wednesday, marking a 10% decline from its August high of $124,000. This drop brought the Fear & Greed Index down to 44—its lowest in two months. However, BTC has since rebounded, climbing to $114,500 by Thursday morning, pushing the index back to a neutral rating of 50, according to TradingView data.
Blockchain analytics firm Santiment confirmed that a recovery is underway but warned that further volatility and market uncertainty remain likely. They also noted growing social interest in assets like Bitcoin, Tether (USDT), XRP, Cardano (ADA), and meme token SNEK.
Market Mood Swings Highlight Investor Psychology
Bitcoin entrepreneur and Trump’s crypto advisor, David Bailey, commented on the emotional nature of market sentiment, stating:
“Sentiment flickers like a flame—euphoria one moment, panic the next.”
Macro Factors and Jackson Hole in Focus
SignalPlus analyst Augustine Fan noted that macroeconomic uncertainty continues to weigh on crypto, especially after Treasury Secretary Scott Bessent’s mixed signals about further BTC purchases for the Strategic Bitcoin Reserve.
Crypto’s next major catalyst may come from Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday. Historically a market-moving event, Powell’s tone could influence expectations for rate cuts.
Markets currently price in an 82% chance of a rate cut in September, though that probability is slipping, according to CME FedWatch data.
