Bitcoin Bounces After 10% Correction—Will Powell Spark the Next Rally?
Bitcoin rose to $113,100 on Aug. 21, 2025, rebounding from a 10% correction from its Aug. 7, 2025 all-time high (ATH) of $124,457, according to CoinMarketCap data.
BTC daily chart (Source: CoinMarketCap)
The price dipped to $112,350 earlier this week bringing the Bitcoin Fear & Greed Index to a two-month low of 44, showing a brief period of market fear.
Crypto Market Stabilizes Following Shifting Sentiment
Recent data shows the index recovering to a neutral-to-greedy range between 50 to 56, a sign of market stabilization.
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The broader crypto market also increased by 1%, with total capitalization at $3.86 trillion in the past 24 hours, based on data from CoinMarketCap.
On-chain analytics firm Santiment stated on X that crypto markets are rebounding as expected but warned that fear, uncertainty, and doubt (FUD) could continue, noting that prices often move inversely to crowd.
The recovery follows bearish sentiment due to macroeconomic factors, including United States Treasury statements rejecting a national Bitcoin reserve, which affected optimism driven by pro-crypto political developments.
Santiment’s Sanbase platform recorded high negative sentiment when Bitcoin price dropped below $113,000, being the most bearish moment since June 22, 2025. The company flagged this as a potential contrarian buying opportunity.
Social media interest surged in Bitcoin, USDT, XRP, ADA, memecoin SNEK, and Strategy ($MSTR), which holds substantial Bitcoin reserves, as revealed in another X post by Santiment.
Powell’s Speech and Macro Factors Drive Market Focus
Investors are closely monitoring as they await Jerome Powell’s, the chair of the US Federal Reserve, speech at Jackson Hole scheduled for Aug. 22, 2025, a major event for financial markets.
It is believed that Powell’s comments could have a significant impact on equities and cryptocurrencies.
According to the CME FedWatch tool, markets are pricing in a 90% probability of an interest rate cut on Sept. 17, 2025, up from earlier estimates of 82%, showing expectations of a dovish stance.
A dovish bias could spark a bullish run, with strategist Jason Williams anticipating a “turbo rip” in crypto prices. A hawkish bias, however, risks driving high selling pressure.
Macroeconomic dynamics continue to influence volatility. The approval of spot Bitcoin exchange-traded funds (ETFs) in 2024 has attracted institutional capital and inflow, increasing market liquidity but also amplifying price fluctuations during FUD-driven sell-offs, according to Forbes.
Meanwhile, SignalPlus analyst Augustine Fan predicts near-term macroeconomic challenges, while Bitcoin entrepreneur David Bailey described the market’s volatility, saying, “One moment euphoria, moments later panic.â€
Volatility Presents Opportunities
Santiment’s analysis shows that Bitcoin’s recent price dip and the accompanying bearish sentiment may be a sign of a contrarian buying opportunity, as extreme fear has signaled market bottoms.
With Bitcoin trading between $113,000 and $116,000 and the Crypto Fear & Greed Index at 50-56, the market remains sensitive to external triggers.
A dovish outcome from Powell’s speech can push Bitcoin toward $120,000-$125,000, supported by sustained ETF inflows and pro-crypto political developments, such as proposals for a U.S. Bitcoin reserve supported by Donald Trump.
However, a breakdown below $112,000 can reignite fear, and the Crypto Fear & Greed Index could again enter the low 40s, testing support at $108,000-$105,000.
