Bitcoin (BTC) Breaks Downtrend but Fed Powell’s Upcoming Speech Looms Over Market

Bitcoin (BTC) has broken through a downtrend that began a week ago. However, the latest bounce is faltering and price action remains weak. The reason? Federal Reserve Chairman Jerome Powell will give his Jackson Hole speech on Friday. A September rate cut, plus possible future rate cuts hang on this. Bitcoin could surge or collapse depending on the outcome.

Powell speech on Friday sets much at stake

Chairman Jerome Powell of the Federal Reserve will give his last ever speech at the annual Jackson Hole summit on Friday. At stake are the economy and markets. Powell will either assent to a rate cut in September in order to boost an economy with a failing jobs market, or he will refuse to make one on the grounds that a more definitive direction for inflation still cannot be predicted.

The pressure on Powell will be enormous. Three out of seven of his normally supportive Fed board are in opposition to his policy of no cuts, and US President Trump has fired abuse at him, calling him a “stubborn mule” and a “numbskull” for not having already cut rates. Powell affirming that he wants to see more incoming data before changing back to an easing policy is likely to infuriate Trump even more. 

In the meantime markets are very uncertain. There is still a whole day to go before Powell walks up to the microphone and delivers his last Jackson Hole speech, therefore volatility may well increase as the hour draws nearer. 

If Powell sticks to his guns and says he will wait for longer on a decision, will this mean that Bitcoin heads into a bear market? Probably not. That said, it could really deflate the market and potentially send Bitcoin into a deeper corrective phase. 

$BTC breaks trend

Source: TradingView

The 4-hour time for the $BTC price reveals how a bounce was made perfectly from the bottom of the channel. However, the bounce has not been particularly strong so far. That said, the price has pushed through the descending trendline and looks to be consolidating on the other side.

The Stochastic RSI indicators are at the top for this time frame, but the 8-hour, 12-hour, and daily time frames all have plenty of room to run.

Inverse head and shoulders pattern still alive

Source: TradingView

The daily time frame shows that the neckline of the inverse head and shoulders is still holding firm. The recent push up through the descending trendline was what was needed to keep this pattern in play. It can be seen that Powell’s speech could either spark this pattern into its measured upside move, or nullify it by forcing the price below the neckline.

The thesis that the market cycle stretches out to Q2 2026

Source: TradingView

The 6-month chart for the $BTC price isn’t one you’ll see published that often. However, in order to get some perspective into where the price is going over these next several months, it is important for seeing the lay of the land on a very high macro scale.

Looking at the chart and the numbered candles for each bull market, a pattern emerges. For the first three cycles it can be seen that each cycle has one more 6-month candle than the one before. If one takes this phenomenon into the present cycle it would suggest that it is far from over yet. Adding one extra 6-month candle to the total would bring the cycle out to June 2026, to say nothing of the possibility for a higher price to end on.

Of course, three cycles is not enough to base a reliable thesis on. That said, many analysts have been touting a market cycle that stretches into 2026 for quite a while now. If this bull market is still going strong come Christmas, you just never know…

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.