Bitcoin Drops Below $80,000 as Fed's Warsh Pledges to Tame Inflation
Bitcoin's price slipped below $80,000 after Federal Reserve Chair Kevin Warsh pledged to bring inflation back to target. This move was seen as hawkish and pushed Treasury yields higher, cooling some of the week's risk-on momentum.
The crypto market is still in a state of limbo, with no clear directional views in sight following last week's short squeeze due to record liquidation in leveraged bearish bets on digital assets. Despite the 4% drop to $76,871, Bitcoin remains up 23% on the week.
Market participants view the move as digestible, with options traders showing cautious optimism ahead of key expiries. Traders are looking at longer-term metrics to gauge the health of the rebound, and many believe that if the 50-week moving average holds, it could be a sign of a bullish structure.
Crypto options traders are cautiously optimistic in the medium to long term, with $6.4 billion in Bitcoin options expiry on Deribit this week leaving market makers facing key positioning decisions.