Bitcoin hovers below $113K as traders eye Powell speech and inflation data

Bitcoin and crypto losses subsided on Tuesday as traders waited for Federal Reserve Chair Jerome Powell’s first remarks since last week’s rate cut and Friday’s core PCE inflation print. Analysts say the duo could set the tone for crypto into October after one of the year’s largest leverage flushes.

Bitfinex analysts noted that futures positioning has reset and liquidity has returned following the Fed’s 25-basis-point move. They flagged $115,200 as a key level to maintain if BTC is to return toward an all-time high. Conversely, a daily break below $115,200 risks a slide back into the $105,500–$115,000 zone.

According to The Block’s price page, crypto’s market cap was shy of $4 trillion as BTC floated near $113,000 and ether steadied at around $4,200.

Derivatives desks echoed the caution. QCP Capital stated that Monday’s wipeout—over $1.7 billion in liquidations—has given way to early signs of market stability, with BTC back in the $110,000–$120,000 band. Options demand is also clustering around $120,000–$125,000 October calls, a sign that next month’s seasonality and Powell/Core PCE are the near-term catalysts, the firm said.

Glassnode reported open interest decreased from $44.8 billion to $42.8 billion as BTC fell below $113,000 during a leverage flush that may reduce forced-selling risk.

Meanwhile, Wall Street flows show a cautious picture after the recent liquidation event. Timothy Misir of BRN said U.S. spot bitcoin ETFs saw $363 million in net outflows Monday, with ether products down $76 million.

However, a broader view suggests institutions and large holders have been active and bullish in the market. “Monday’s washout cleared crowded long positions and left the market with cleaner liquidity,” Misir wrote. “That’s constructive only if larger buyers such as ETFs, treasuries, and the 10–10k BTC cohort continue to absorb supply.”

He noted three large exchange deposit waves in the past 48 hours, even as wallets with 10–10k BTC balances accumulated roughly 56,000 BTC since Aug. 27 and exchange balances fell by about 31,000 BTC over four weeks. These are signals that whales are buying the dip while some traders sold into the bounce, he said.

Powell speaks Tuesday in Rhode Island, with core PCE due Friday, Sept. 26. Traders will likely watch whether the Fed leans into a faster cutting path. A tame PCE could revive the liquidity bid, but a hawkish tone could keep BTC capped near $118,000 and push capital back to the sidelines.

“If inflation pressures appear contained, markets may interpret this as room for further Fed cuts, providing liquidity tailwinds into Q4. That could be the catalyst for BTC to attempt a long-anticipated breakout,” according to QCP analysts.

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