Bitcoin 
$78,302 recently breached its $112,500 support level, dipping to a new low of $112,201. Although altcoins have yet to experience sharp sell-offs, negativity is expected to prevail for at least a few weeks. As the Federal Reserve’s meeting approaches, market tariffs are making their presence felt even more. In its recent report, Fitch Ratings indirectly signaled effects on cryptocurrencies.
Cryptocurrency Market Decline
The Fitch Ratings report indicates a significant weakening of consumer spending in the first half of 2025, deviating from the pace seen at the end of 2024. Uncertainty in trade policy, fluctuations in equity markets, and the blow to consumer confidence are causing a reduction in household spending. The contraction in job supply and the cooling labor market are also restricting household income.
Economic Research Director Olu Sonola pointed out that the cost of tariffs is being reflected in goods prices, pushing inflation upwards. This scenario suggests a potential stagflation in the coming months.
Economists expect the contraction in consumer spending to intensify, further pressuring consumer confidence. This should be interpreted as a waning appetite for risk in the markets. With consumer spending decreasing, confidence weakening, and inflation rising, it may not be logical for investors to allocate capital to cryptocurrencies or take risks in this sector.
Bitcoin (BTC)
Despite currently being roughly 10% below its all-time high, Bitcoin’s drop was initiated by a greater fear. When the Producer Price Index (PPI) data appeared, it indicated that the remainder of the year might not favor a good process for cryptocurrencies, at least predicting tough times ahead for the next one to two months. Back then, the price was over $120,000. Now, Bitcoin is close to losing this crucial level, having tested the lows of the August 2nd sell-offs.
Should the sell-off continue, the next support level likely to be tested would be $108,000, with potential further declines to $105,300 and $101,200 entering the discussion.
In the short term, owing to comments by Powell anticipated for tomorrow, fears may further sustain, potentially leading to a test of the $108,000 level by Sunday. In the medium term, institutional demand could provide some support for Ethereum 
$2,332 and other cryptocurrencies, and anticipated ETF approvals in October, alongside possible normalization in inflation figures, could position the market more favorably from our current standpoint.
