Bitcoin lost momentum after briefly breaking above $81,000 as traders awaited Federal Reserve Chair Kevin Warsh’s inaugural Jackson Hole speech. The cryptocurrency fell soon after reaching the key resistance level for the second time this week, echoing its Aug. 25 retreat after bitcoin climbed above $80,000 for the first time in more than three months.
Market data showed bitcoin reaching a high of $81,455 shortly after 9:30 p.m. Thursday, temporarily overcoming bearish pressure that had intensified since Tuesday. A sharp sell-off then erased the gains recorded on Aug. 27, pushing bitcoin to a session low of $78,442 at around 10:15 a.m.
More than an hour after Warsh’s speech, bitcoin dropped to a new low of $76,877 before quickly recovering above $77,000 and testing $78,000.
Bitcoin’s Weekly Gains Narrow as Liquidations Rise
The retreat reduced bitcoin’s weekly gain to 2% and lowered its market capitalization to $1.58 trillion from more than $1.61 trillion. Despite the pullback, bitcoin remains on track for double-digit monthly gains following its sharp rally between Aug. 19 and Aug. 21.
In the derivatives market, bitcoin’s reversal less than 24 hours after reclaiming $80,000 triggered $107 million in liquidations across long and short positions. Data from Coinglass showed a relatively even split, with $50 million in long positions and $57 million in short positions wiped out. Across the wider cryptocurrency market, approximately $300 million in leveraged positions disappeared.
According to market analysis outlet Cryptoreviewing, bitcoin’s early-morning surge to $81,500 followed by an immediate decline below $79,300 contributed to $465 million in 24-hour liquidations. That figure was significantly higher than the standard derivatives losses indicated by exchange data alone.
In a post on X, Cryptoreviewing said bitcoin swept the upside liquidity zone between $80,400 and $81,600 almost perfectly but failed to hold above $80,000. The failure weakened short-term momentum and shifted the near-term market bias back toward caution.
Bitcoin Order-Book Liquidity Skews Lower
Cryptoreviewing also highlighted a sharp imbalance in liquidity distribution. Approximately $5.7 billion is positioned below the market between $75,000 and $78,500, compared with about $2.8 billion above between $81,500 and $84,000. The analysis said the imbalance leaves a deeper bitcoin pullback as a meaningful higher-timeframe risk.
On lower timeframes, the largest liquidity pockets are concentrated around $78,600 and $79,100 below the market, and $81,300 and $81,900 above it. The analysis identified these levels as the most likely sweep zones in the near term.
In its order-flow analysis, Cryptoreviewing said whales were maintaining significant sell walls between $80,800 and $83,000. Large bids remained stacked around $78,000 to $79,000 and at lower levels, suggesting institutional buyers were continuing to buy dips while bitcoin faced a formidable ceiling for further gains.
Open interest has rebuilt, futures traders are adding exposure, and the Coinbase Premium has turned positive. However, weakening spot demand suggests leverage is returning faster than organic buying.
Warsh Rejects Forward Guidance
In his address, Warsh reiterated his rejection of “forward guidance”—the signaling strategy favored by previous Federal Reserve chairs—arguing that persistent inflation continues to threaten economic momentum despite recent positive data.
He called for a return to traditional central banking, with interest rates adjusted as economic conditions change to maintain price stability without destabilizing employment.
The Iran war and surging crude oil prices have clouded the outlook for U.S. economic growth. However, Warsh maintained a resilient tone, pointing to unprecedented corporate spending on technology and artificial intelligence infrastructure as a powerful counterweight.
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