Bitcoin started the week with a correction, sliding below $113,000. For the crypto market, this move was hardly surprising, as traders are focused on the upcoming Federal Reserve meeting in September. Analysts widely agree that this event will determine the short-term trajectory of the leading cryptocurrency.

In recent years, the Fed has become a central driver for risk assets. Interest rate decisions directly impact liquidity and institutional appetite for exposure to bitcoin. This time, the market is largely pricing in a modest rate cut, fueling cautious optimism.

But investor attention extends beyond September. Increasingly, the conversation is shifting to 2026, when President Donald Trump will have the authority to appoint Jerome Powell’s successor as Fed Chair. This looming transition has significant implications for monetary policy in the years ahead.

Economist Alex Krüger argues that a leadership change at the Fed would almost certainly bring a more dovish stance on rates. Such a shift could reshape capital markets and enhance bitcoin’s appeal as an alternative asset.

For now, bitcoin remains rangebound. Market participants are hesitant to build large positions ahead of the September FOMC decision. Analysts warn that the outcome could serve as a catalyst for either renewed correction or a breakout into a fresh bullish trend.

Ultimately, bitcoin finds itself at the intersection of short-term monetary policy and long-term political uncertainty. In such an environment, investors prefer to stay cautious, preserve liquidity, and closely watch signals from the Federal Reserve.

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