Bitcoin dropped below $113,000 on Monday, erasing the strong gains it made in the weekend session following cautious remarks from Federal Reserve Chairman Jerome Powell. Meanwhile, Ethereum, the second largest cryptocurrency, stabilized near its record highs.
Bitcoin saw a decline of 2.1%, reaching $112,550.5, after hitting its lowest level in more than six weeks near $111,000 during the previous session, as investors took profits following Friday’s sharp rise.
The cryptocurrency had surged above $117,000 after Powell’s remarks at the Jackson Hole symposium, where he highlighted increasing risks to the job market and suggested that a “shift in the balance of risks may require an adjustment in monetary policy,” fueling expectations of a possible interest rate cut in September. This optimism pushed investors toward high risk assets, with cryptocurrencies leading the charge. However, Bitcoin later retraced due to profit taking and the emergence of technical resistance levels, signaling a temporary consolidation phase for the market.
In a related development, Japanese Finance Minister Katsunobu Kato confirmed that the government is working on a framework to support digital asset trading, indicating that cryptocurrencies could become part of diversified investment portfolios, signaling a shift in the official stance toward broader adoption of digital currencies. These remarks come amid ongoing government efforts to regulate the market and ensure investor protection, reflecting Japan’s commitment to balancing innovation with financial stability.
As for alternative cryptocurrencies, trading was largely subdued, with prices moving within narrow ranges as overall momentum slowed. Ethereum dropped 1.7% to $4,715.73 after hitting a record high of $4,955 in the previous session. Similarly, XRP declined by 1.7% to $3.00.
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