Wintermute said on Sept. 1 that Warsh’s speech at the Jackson Hole gathering pushed market expectations for a September rate hike to 61.9%, making the Sept. 15-16 Federal Open Market Committee meeting a major catalyst for risk assets, including cryptocurrencies.
The firm also laid out August performance across asset classes. U.S. Treasuries with maturities longer than 20 years rose 1.01%, the S&P 500 gained 0.47%, the Nasdaq advanced 0.42%, and BTC added 0.10%. ETH fell 0.86%, while gold and Brent crude rose 3.42% and 4.31%, respectively.
BTC briefly topped $81,000 before pulling back
According to Wintermute, BTC spent the past week digesting an earlier 23% gain. It briefly moved above $81,000, then dropped back below $78,000 after Warsh’s speech, ultimately ending the week up 0.10%.
Wintermute said BTC still looked relatively constructive after facing a hawkish Federal Reserve stance, a pullback in chip stocks and month-end effects. At the same time, the firm said $82,000 has repeatedly acted as a resistance zone.
The firm also said that under-allocation by part of the market remains an important source of support for BTC prices.
Key levels are $75,000, $72,000 and $82,000
Wintermute identified $75,000 and $72,000 as key support levels, with $82,000 as resistance. If BTC posts a weekly close below $72,000, there would be little obvious support underneath, the firm said.
In the near term, Wintermute said a healthier setup may be for BTC to retest the area around $75,000, complete a round of deleveraging, and then attempt another breakout higher.
First two weeks of September are in focus
Wintermute said the first two weeks of September could have a significant effect on market direction. The Sept. 4 nonfarm payrolls report may materially change rate-hike expectations before the FOMC meeting.
The firm said it would mainly watch two signals if its view changes:
- weekly BTC ETF flows turning to net outflows;
- a weekly BTC close below $72,000.