Bitcoin fell to $76,877 on Friday after Federal Reserve Chair Kevin Warsh delivered a hawkish keynote at Jackson Hole, confirming the resistance zone that had limited the cryptocurrency earlier in the week.
September rate-hike expectations rose to approximately 56%, up from about 35% a day earlier, after Warsh said the Federal Reserve still has “work to do” on inflation. Despite the sell-off, Myriad traders continued to favor Bitcoin rising to $84,000 over falling to $55,000.
Bitcoin declined from an overnight high of $81,455, surrendering most of its double-digit weekly gain. The high was reached within a resistance zone that had already capped several attempted breakouts this year.
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Warsh’s Jackson Hole speech drives Bitcoin lower
Warsh marked his 100th day as Fed chair by offering markets no fresh policy guidance, but his comments were enough to pressure risk assets. In his keynote, he said the Fed needs to see inflation moving clearly toward its target and doing so at a sufficient pace before it can declare its work complete. Until then, the central bank still has “work to do.”
Traders interpreted the remarks as hawkish. According to the CME Group’s FedWatch tool, the probability of a September rate hike increased to 55.7% from 35.4% the previous day.
The move also affected leveraged crypto positions. CoinGlass data showed approximately $481 million in liquidations across the cryptocurrency market during the 24 hours surrounding the speech. More than $360 million involved long positions caught off guard by Bitcoin’s decline. Bitcoin ended Friday at $77,557, down 3.39%.
Bitcoin price analysis: What the charts show
From a technical perspective, the pullback looks more like a consolidation phase than a confirmed trend reversal. Bitcoin’s Relative Strength Index stands at 69.7, below the overbought level above 80 that preceded Tuesday’s rejection. Meanwhile, the Average Directional Index is near 39.5, still indicating a strong trend rather than a broken one.
Bitcoin remains within the bullish move that carried it from the June low near $68,858 to this week’s high around $81,455. If selling intensifies, traders are likely to monitor the $73,670-$75,157 area first. A close below that zone would put both the 50-week moving average and the June breakout structure under pressure.
On the upside, the $81,000-$82,500 area remains the key resistance shelf. Bulls need to reclaim it to establish a path toward fresh highs.
Myriad traders continue to favor Bitcoin at $84,000
The longer-term bullish outlook is reflected in Myriad’s “BTC next move” market, which has been active since late February. The market has recorded $231,000 in trading volume and has no fixed resolution date.
Its two outcomes—a move to $84,000 or a decline to $55,000—have repeatedly exchanged the lead since spring as Bitcoin’s price moved sharply in both directions. That pattern changed this month: the probability of the $84,000 outcome rose by 31.7 percentage points to 77%, compared with 23% for the $55,000 scenario. Friday’s rejection from resistance did not materially alter that split.
Myriad: Where does Bitcoin go next? Click to make your prediction.
The last time traders were this bullish was around April.
Bitcoin’s fundamental support remains intact
The fundamental case for higher Bitcoin prices has not significantly changed. U.S. spot Bitcoin exchange-traded funds recorded $2.8 billion in inflows over eight consecutive days through Wednesday, their longest such streak since April.
The demand followed a Treasury Department announcement that it would at least double its purchases of long-dated bonds beginning September 9. The move supports a segment of the bond market that has faced weak demand since June. Lower long-term yields and a weaker dollar revived the “debasement trade” that helped Bitcoin climb from approximately $62,000 to $80,000 this month.
Warsh’s remarks did not change that backdrop. He outlined no explicit interest-rate path and instead highlighted an inflation condition the Fed has not yet met.
Why Bitcoin traders should watch the bears
In the short term, the market setup still calls for caution. Warsh’s rejection of forward guidance leaves traders without a clear policy signal until the Fed’s next rate decision. Bitcoin therefore remains vulnerable to headline-driven volatility around every inflation report released before then.
The PCE price index is increasing at an annual rate of 3.7%, nearly twice the Fed’s 2% target, and Warsh provided no timetable for inflation to return to that level.
Bitcoin has already faced multiple rejections at the current resistance zone in recent months. Warsh’s speech gave bulls no clear reason to expect the Federal Reserve to make the next attempt at a breakout easier.
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
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