Bitcoin just knifed below $113,000 and snapped back just as fast — the kind of volatility that shows positioning, not conviction, is driving the tape ahead of Fed Chair Jerome Powell’s high-stakes Jackson Hole remarks. With the DXY firming and >$500M in crypto longs wiped in a day, traders are asking the only question that matters this week: is this a healthy bull-market pause — or the start of a deeper, macro-driven correction?

What Just Happened

Bitcoin briefly tagged the $112.8K area before stabilizing, a classic “sell the rumor” move as desks hedge into Powell’s Jackson Hole speech (Aug 21–23). Derivatives did the heavy lifting: over $500M in long liquidations amplified the drop (per market trackers), confirming over-leveraged positioning into event risk. The U.S. dollar ticked higher into the speech, a near-term headwind for crypto beta.

Why This Matters to Traders

Powell’s tone can reset cross-asset risk appetite by shifting expectations on growth, inflation, and the path of rates. A more hawkish message = stronger dollar, tighter financial conditions, pressure on BTC and alts. A dovish lean = easier liquidity vibes, potential relief rally. Historically, Jackson Hole has coincided with sharp single-day swings as forward guidance ripples through yields and FX — crypto rarely ignores that signal.

Key Levels and Flows

The market is coiling around clear spot/futures confluence: - $110K: psychological anchor and recent wash area; a break risks another liquidation wave. - $115K: reclaim flips near-term momentum neutral and suggests forced sellers are spent. - $120K: first meaningful resistance; a daily close above argues the dip was a shakeout.

Flows remain pivotal. The spot BTC ETFs are a sticky institutional on-ramp even as August flows were choppy. October brings clustered ETF catalysts after SEC delays (including SOL decisions around Oct 16 and XRP around Oct 19), which could refocus volatility and rotations. Watch funding and basis for stress — a reset to flat/negative often follows liquidation cascades.

Actionable Playbook (Not Financial Advice)

• Into the speech: Expect wider spreads and wicks. Reduce leverage, pre-define invalidation, and size for event volatility.
• If DXY spikes on hawkish tone: BTC can probe $110K. Don’t knife-catch; wait for liquidation clusters to exhaust and momentum to stall before considering fades.
• If DXY fades on dovish hints: Look for a swift reclaim of $115K–$120K. Confirmation improves with rising spot-led bids and stabilizing funding.
• Alt-beta: ETH, SOL, XRP tend to magnify BTC’s post-event move. Keep risk tight; correlation can cut both ways.
• Post-event: Track ETF net flows and UST yields. Positive flows + softer yields strengthen the bull-pause narrative.

What to Watch Next

Powell’s wording on growth risks and the reaction in UST yields and the Dollar Index (DXY) over the next 24–48 hours will dictate the knee-jerk path. If BTC holds above $115K on closing bases with improving spot demand, the bull trend likely resumes. Lose $110K on high volume with funding re-levering long, and the market invites a deeper cleanup.

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