The cryptocurrency market has recently experienced a significant adjustment, with Bit falling approximately 10% from a high of $124,000 to $114,000, raising widespread concerns in the market. However, this may just be a small episode in a larger pattern. What is truly worth paying attention to is the upcoming speech by Federal Reserve Chairman Powell, which could become a key factor in determining the direction of the cryptocurrency market.

The recent pullback in the market is not due to changes in the fundamentals of encryption currencies, but rather a result of large investors beginning to cautiously adjust their positions. From a technical analysis perspective, the upward momentum of Bit has weakened, with the KDJ indicator reaching 105, suggesting that it may be difficult to continue rising in the short term. Meanwhile, the significant decline in stocks related to institutional investors also reflects that some large funds may be taking profits.

However, the real focus of the market is shifting towards the Federal Reserve's policy stance. Historical experience shows that the Federal Reserve's monetary policy has a profound impact on the encryption currency market. For example, when Powell stated in 2021 that interest rates would not be raised, the price of Bit surged; whereas in 2022, when he hinted at raising interest rates, the encryption currency market experienced a significant pullback.

Currently, the inflation rate in the United States has dropped to 2.5%, and the unemployment rate is at 4.1%. These economic indicators have led the market to generally expect that Powell may hint at the possibility of a rate cut in September during his speech. The extent of the rate cut will be crucial: if he hints at a cut of 25 basis points, Bitcoin could rebound to around $120,000; if it's 50 basis points, it may even break through $130,000. However, if he does not mention a rate cut at all in his speech, the market could experience significant volatility.

Despite the market's dovish expectations, there remains a certain level of uncertainty. Investors need to closely monitor Powell's speech, as it could have a significant impact on the encryption market. Regardless of the outcome, this will undoubtedly be a key moment that cryptocurrency investors need to pay close attention to.