Bitcoin Rally Stalls Amid Hawkish Fed Remarks, But Bullish Sentiment Persists
Bitcoin's rally stalled after Fed Chair Kevin Warsh's hawkish keynote at Jackson Hole, but long-term sentiment remains bullish. The cryptocurrency dropped as low as $76,877 on Friday, giving up most of a double-digit weekly gain.
The decline came from an overnight high of $81,455, which was inside the resistance zone that had capped several prior breakout attempts this year. This resistance zone held once again, and traders are still pricing Bitcoin's next major move at 77% for $84,000 versus 23% for $55,000.
The fundamental case for higher prices hasn't gone anywhere. U.S. spot Bitcoin ETFs pulled in $2.8 billion over eight straight days of inflows through Wednesday, the longest streak since April. This demand is driven by a Treasury Department announcement that it will at least double its long-dated bond buybacks starting September 9.
Warsh's remarks left this backdrop unchanged, as he set no explicit rate path and merely flagged a condition the Fed hasn't yet met. The reaction rippled through leveraged positioning, with roughly $481 million in liquidations across the crypto market in the 24 hours around the speech, with more than $360 million of that coming from long positions caught wrong-footed by the drop.