Bitcoin Rally May Be Short-Lived as Warsh Speech Looms
Bitcoin's price has surged over $15,000 in the past 10 days alone, reaching near three-month highs. However, this rally may be short-lived if Federal Reserve Chairman Kevin Warsh signals a hawkish stance at his highly anticipated speech at the Jackson Hole Economic Symposium tomorrow.
The return of Bitcoin ETF inflows is seen as one of the key bullish developments in recent weeks, with $2.8 billion pouring into US-listed ETFs over the last eight days alone. This trend has continued despite prices reaching three-month highs.
Warsh's speech at Jackson Hole is a major event risk for traders, who are looking for any hint of his stance on inflation and the Fed's relationship with the US Treasury. If Warsh signals tacit approval of elevated inflation or Treasury Secretary Bessent's meddling in the Treasury market, Bitcoin's rally could extend further from here.
However, there is a risk of a near-term pullback if Warsh says anything remotely hawkish, with some traders looking for dips towards the mid-$70Ks to step in and buy. The overbought reading in the 14-day RSI underlines this risk.