Will Bitcoin Soar or Stumble? Tolstoy Discovers Fed Drama and the Crypto Circus! 🪙

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Key Takeaways

In the stately dance of destiny called the markets, uncertainty is perhaps the only certainty. September, forever peeking coyly around the corridor, whispers rumors of rate cuts anew. Yet, just as spring’s promise is thwarted by late frost, so too do traders—armed with greed and mild headaches—now harvest their profits, leaving our dear Bitcoin to wander sideways, in what CryptoQuant terms “market structure,” but Tolstoy calls “the human condition, but in numbers.”

On the first day of August, the likelihood that the Federal Reserve—who are to interest rates what stern governesses are to unruly children—would in September slash those rates, leapt to 80%. Only days earlier, the chance had been about as skinny as the honest man’s wallet after a night at the Moscow clubs: down by 20%. Bitcoin, ever the mistress to chance, thrilled at this new hope. 

Alas, not all is to be trusted in love, war, or Federal meetings. At the July 31 gathering, the Fed paused—no dancing, just poised toes—and so it was that markets, ever hopeful, tripped in anticipation, reprisals sent the rate cuts sliding down, and Bitcoin, perhaps in protest, slumped to $114K, down from its almost triumphant $120K. As Tolstoy might say: the only thing more volatile than cryptocurrency is the human heart.

Will the Fed’s next move awaken Bitcoin from its slumber?

Now, enter stage left: America’s job market report, equipped with all the swagger of an underfed bear. Only 73,000 jobs were added in July—so short of the predicted 106,000. It’s almost as if a lazy peasant harvest has come early. 

But wait—May and June also brought downward revisions so staggering, even the tsar might blush. May fell from 144K to a pitiful 19K, June dropped from 133K to 14K. Wall Street sages observed from their dachas: “Ah, this is a positive macro development,” which in old Russian means, “We might make some roubles out of this mess yet.”

As relayed by the herald ZeroHedge, this episode mirrors a fabled September of yore, when the Fed’s mighty blade fell 50 basis points and Bitcoin and his cryptocurrency cavalry galloped off to glory. The odds of a nifty little 25 basis point cut this September have now soared to 80%—a number most Russians only see at vodka time.

What does fate hold for BTC?

Yet, the winds of fate remain contrary. Despite the bullish whispers about what the Fed may (or may not) do, Bitcoin’s price slid 2% to $112.7K, dragging U.S. equities along like disinterested party guests at 2 a.m. 

Tom Lee, CEO, Wall Street analyst, and part-time fortune teller, pronounced this a “normal dip”—as normal as a Count’s tax bill—and suggested investors should breathe deeply, perhaps after holding their nose. 

Arthur Hayes, founding father of BitMEX, apparently had the vision of more Trump tariffs descending upon us in Q3, and, perhaps not trusting the Fates (or his wallet), shed his Ethereum and Ethena long positions. He declared, 

“US Tariff bill coming due in Q3… at least the market believes that after NFP print. No major economy is creating enough credit fast enough to boost nominal GDP. So $BTC tests $100k, $ETH tests $3k.” (One wonders—does he also consult the stars, or merely his accountant?)

CryptoQuant, ever the Cassandra, warns of market cooling after a third wave of profit-taking. The American investor, they say, seems less enthusiastic—perhaps he is at the beach trying to forget his portfolio. “Months of brooding consolidation” may lay ahead. The vodka will run dry before the big move comes, friends.

“Following the recent wave of profit-taking, Bitcoin and Ethereum prices may enter a period of consolidation before the next leg higher.” (Or lower, or sideways… insert speculation here.)

And so, like Anna Karenina waiting for the next train, we watch: August and September will deliver more data, more hopes, and perhaps a few more dashed dreams. New job and inflation numbers are due on the 7th and 12th of August. Will these finally sway the Fed and thus tip Bitcoin off its existential teeter-totter? Or will the market simply continue to mirror life—brief rallies, sudden tumbles, and everyone looking for someone else to blame? 🤷‍♂️

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2025-08-03 09:15