Bitcoin fell to as low as $76,877 on Friday, giving back most of its double-digit gain for the week after Federal Reserve Chair Kevin Warsh said in his first Jackson Hole keynote that inflation is not cooling fast enough.
The decline followed an overnight high of $81,455, reached inside a resistance zone that has already capped several breakout attempts earlier this year. The area held again.
Warsh, speaking on his 100th day in the job, did not offer markets any new policy guidance. The tone alone moved prices. In the speech, he said the Fed needs to see inflation moving clearly and quickly enough toward target before it can say the job is done. Failing that, the central bank still has “work to do.”
Markets took the speech as hawkish
Traders interpreted those remarks as hawkish. According to CME Group’s FedWatch tool, the odds of a September rate hike jumped to 55.7% from 35.4% a day earlier.
The repricing fed into leveraged crypto positions. CoinGlass data showed roughly $481 million in liquidations across the crypto market in the 24 hours around the speech, with more than $360 million of that tied to long positions caught on the wrong side of the drop. Bitcoin ended the day at $77,557, down 3.39%.
Chart signals point to consolidation, not a trend break
On the technical side, the pullback looks more like a pause within an uptrend than a reversal. The Relative Strength Index stood at 69.7, well below the overbought reading above 80 that came before Tuesday’s rejection. The Average Directional Index, near 39.5, still indicates a strong trend rather than a broken one.
Price also remains within the bullish leg running from the June low near $68,858 to this week’s high near $81,455.
If selling extends, the first band traders are likely to watch is the $73,670 to $75,157 range, described in the article as the golden zone. A close back below that area would call both the 50-week moving average and the June breakout structure into question. Above the market, bulls still need to reclaim the $81,000 to $82,500 shelf before pushing for fresh highs.
Myriad pricing still leans to the upside over the longer run
The article places the stronger long-term bullish case in Myriad’s prediction market. Its “BTC next move” contract has been active since late February, has seen $231,000 in traded volume, and does not have a fixed resolution date.
The market tracks two outcomes: a move to $84,000 or a drop to $55,000. Since spring, leadership between those two outcomes had shifted back and forth as Bitcoin whipsawed through the year.
That changed this month. The $84,000 outcome rose by 31.7 percentage points to 77%, while the $55,000 scenario stood at 23%. Friday’s rejection at resistance did not alter that split.
The article says predictors were last this bullish near April.
ETF inflows and Treasury action remain part of the backdrop
The underlying case for higher prices, as presented in the piece, has not disappeared. U.S. spot Bitcoin ETFs pulled in $2.8 billion over eight straight days of inflows through Wednesday, the longest streak since April.
The article links that demand to a Treasury Department announcement that it would at least double its long-dated bond buybacks starting September 9. The stated purpose was to support the long end of the bond market, where demand has been weak since June.
Lower long-end yields and a softer dollar revived the “debasement trade,” which the article says helped drive Bitcoin from roughly $62,000 to $80,000 this month.
Warsh’s remarks did not change that backdrop, according to the article, because he did not set an explicit rate path and only pointed to a condition the Fed has not yet met.
Near-term setup still argues for caution
Short term, the article says caution is still warranted. Warsh’s push to abandon forward guidance leaves traders without a clean signal until the Fed’s next rate decision. That leaves Bitcoin exposed to headline-driven swings on each inflation reading between now and then.
The PCE price index is running at 3.7% on an annual basis, nearly double the Fed’s 2% target, and Warsh gave no timeline for when that would change.
At the same time, resistance has already turned back multiple attempts in prior months, and Warsh’s speech gave bulls no new reason to expect the next test will be easier.
The article closes by noting that the author’s views and opinions are provided for informational purposes only and do not constitute financial, investment, or other advice.