Bitcoin Plunges Below $77K Amid Fed Hawkishness and $488M Crypto Liquidations
Bitcoin dropped below $77,000 on August 29 after Federal Reserve Chair Kevin Warsh's hawkish remarks at the Jackson Hole symposium sent shockwaves through crypto markets. The nearly 3% drop saw Bitcoin touch lows around $76,845, with liquidations totaling nearly $488 million over 24 hours.
The shift in expectations pushed the probability of a September rate hike from roughly 35% to between 50% and 60%, which has immediate consequences for Bitcoin holders and traders. Leveraged long positions accounted for over $360 million of the total liquidations, with approximately $141 million coming from Bitcoin alone.
The reaction is not isolated, as Ethereum and other major altcoins such as BNB, XRP, ADA, XLM, and BCH also declined, reflecting a synchronized market response to the Fed's hawkish stance. The Personal Consumption Expenditures (PCE) inflation gauge remains well above the Fed's 2% target, leading market participants to reassess the likelihood and magnitude of upcoming rate hikes.
Despite the short-term price weakness and liquidation events, institutional interest in Bitcoin remains robust, particularly through US spot Bitcoin ETFs. On August 27, these funds recorded net inflows of $242.3 million, marking the ninth consecutive day of inflows and pushing total August inflows above $3 billion.