Bitcoin (BTC) fell about 0.7% over the 24 hours to around $77,800 on Aug. 31, extending its retreat after another failed attempt to hold above the $80,000 level.
The decline followed a shift in global market expectations after Federal Reserve Chair Kevin Warsh’s speech at Jackson Hole on Friday. Warsh said inflation remained too high and indicated that further tightening could be necessary to bring inflation back to the Fed’s 2% target.
The implied probability of a September rate increase climbed to approximately 57% on Monday, while the two-year US Treasury yield reached its highest level in more than a month. Barclays also revised its forecast after the speech and now expects two 25-basis-point rate increases, in September and December. The bank had previously expected interest rates to remain unchanged through the end of 2026.
Bitcoin pressured by higher yields and geopolitical tensions
Higher yields weighed on other risk assets. Asian equities fell on Monday, while US and European stock futures traded lower as markets adjusted to the prospect of tighter monetary policy.
Renewed conflict between the US and Iran added to selling pressure over the weekend. US forces struck Iranian missile launchers on Larak Island, followed by retaliatory Iranian attacks against US forces in Jordan.
Brent crude subsequently rose about 3.3% to $91.01 per barrel. The increase in oil prices added to inflation concerns as markets were already pricing in a higher probability of another Federal Reserve rate increase.
Bitcoin entered the latest period of macroeconomic pressure after its strong August recovery stalled around $80,000. BTC gained roughly 23% over the past month and briefly traded above $81,000 last week, but repeated attempts to establish support in the $80,000-$82,000 region failed.
Selling accelerated early on Aug. 31 after Bitcoin reached about $79,300 late on Saturday before falling below $78,000. The cryptocurrency briefly dropped toward $77,300, then surged toward $78,600 before giving up those gains.
Leveraged positions contributed to the speed of the decline. Bitcoin futures open interest stood near $54.8 billion on Aug. 30, while roughly $390 million in crypto positions were liquidated over the previous 24 hours. Long positions accounted for about 70% of the losses.
Institutional demand also weakened before the weekend. US spot Bitcoin exchange-traded funds recorded $201.8 million in net outflows on Aug. 28 after receiving $314.4 million on Aug. 25, $232.1 million on Aug. 26 and $242.2 million on Aug. 27, according to SoSoValue data.
Despite Friday’s reversal, the funds remained at approximately $3.3 billion in net inflows for August.
Bitcoin price analysis
Bitcoin’s daily chart shows the price holding well above all four major exponential moving averages despite its retreat from $80,000.
On the 2-hour chart, Bitcoin was trading near $77,800, below its 20-period EMA at $78,207, 50-period EMA at $78,288 and 100-period EMA at $77,399. The price remained above the 200-period EMA at $74,572.
Bitcoin technical analysis
The setup indicates that short-term momentum has weakened, with Bitcoin trading below its 20- and 50-period moving averages. However, the price remains above the 100- and 200-period EMAs, leaving the broader recovery structure intact for now.
A sustained break below the $77,400 area could expose Bitcoin to further downside toward the 200-period EMA near $74,600. On the upside, a move back above the $78,200-$78,300 zone would bring the recent highs near $79,000-$80,000 into focus.
The Stochastic RSI has also retreated from overbought territory. The faster line stands at 43.71, below the slower line at 46.56, indicating that near-term buying momentum has eased.
A renewed move above $78,300 could signal improving momentum, while a deeper decline in the Stochastic RSI would reinforce the risk of further consolidation or a pullback. The bearish crossover shows that upside momentum has weakened while Bitcoin remains below $80,000.
The Directional Movement Index (DMI) is not currently indicating a clear bearish trend. The positive directional indicator stands at 19.02, above the negative directional indicator at 15.40, while ADX is at 24.44.
These readings suggest that buyers retain a slight directional advantage, although the relatively narrow gap between the two directional indicators points to limited conviction.
Bitcoin’s inability to reclaim the $78,200-$78,300 area keeps that zone as immediate resistance. A sustained move above it could open the way toward $79,000 and the $80,000 psychological level.
On the downside, the 100-period EMA around $77,400 is an important near-term support level. A break below it could expose the $76,000-$77,000 region, with the 200-period EMA near $74,600 providing deeper support.
The Williams %R reading is around -66.11, indicating that Bitcoin has moved back toward the lower portion of its recent trading range but is not yet in oversold territory. The indicator would need to fall below -80 to signal more pronounced oversold conditions.
A recovery in Williams %R alongside a move back above the $78,200-$78,300 EMA cluster would indicate improving short-term momentum. Conversely, a move below -80 combined with a break under the $77,400 support could increase the risk of a deeper pullback toward $76,000 and potentially the 200-period EMA.
