Bitcoin's Hawkish Hiccup
On August 28th, Federal Reserve Chair Kevin Warsh delivered a hawkish assessment of inflation at the Jackson Hole symposium, reaffirming the Fed's 2% target for core PCE inflation and labeling tackling price pressures as policymakers' top priority.
This more hawkish stance increased expectations for a rate hike at the September meeting, with the market pricing in a higher probability of such an outcome. In response, Bitcoin pulled back, giving up part of its August gains.
The four-hour BTC/USD chart shows an uptrend from $63,000 to a peak near $81,500 on August 28th. However, an ascending wedge formed near the top of this advance, and the price broke below its lower boundary on elevated volume.
While the decline has yet to develop into a sustained move, momentum has slowed, and Bitcoin is currently trading within the density of the market profile, between the Point of Control (POC) at $78,900 and the lower profile boundary at $78,100. If sellers fail to push the price lower, Bitcoin would first need to overcome the market-profile density on the way up.