Bitcoin fell to $76,877 on Friday, giving up most of its gains for the week. The immediate trigger for the pullback was remarks by Federal Reserve Chair Kevin Warsh at Jackson Hole, where he emphasized that the pace of inflation decline remains insufficient and that the Fed "has more work to do" in combating inflation.
The market immediately repriced the interest rate path. CME FedWatch data showed that traders' bets on a September rate hike rose from 35.4% the previous day to 55.7%. As a result, Bitcoin quickly retreated from its overnight high of $81,455, once again facing resistance at the price range that had previously halted upward momentum, ultimately closing at $77,557, down 3.39% on the day.
Expectations of rate hikes increase volatility
The volatility following the speech rapidly spread to leveraged positions. According to CoinGlass data, within the 24 hours before and after the speech, approximately $481 million was liquidated across the crypto market, with over $360 million coming from long positions.
This means that short-term capital that chased prices at elevated levels faced a concentrated stop-loss. Although Bitcoin did not break below its previous key structure, the resistance level has come into effect again, significantly cooling short-term market risk appetite.
The resistance zone has not yet been broken.
From a price performance perspective, this pullback occurred near the $81,000 to $82,500 range. This area has repeatedly resisted upward attempts this year and has once again served as a short-term turning point.
The article notes that if the downtrend continues to expand, the $73,670 to $75,157 range will become the first key support zone of interest. A close below this range could test the 50-week moving average and the breakout structure established since June.
However, the current pullback appears more like a consolidation after the rally rather than a trend reversal. Bitcoin remains within its upward range since the June low of $68,858, with short-term momentum simply slowing at higher levels.
Bullish bets still dominate in the long term
Despite a noticeable pullback on Friday, pricing in the prediction markets has not shifted significantly toward pessimism. Myriad’s “Bitcoin’s Next Move” market shows that traders are currently assigning a 77% probability to Bitcoin rising toward $84,000, and a 23% probability to it falling toward $55,000.
Since this market began trading at the end of February, leadership between the two sides has shifted multiple times, but since the start of this month, the bullish side has clearly expanded its advantage. Friday’s pullback did not alter this distribution, indicating that some traders still view this decline as a short-term fluctuation rather than a reversal of the medium- to long-term trend.
An important backdrop supporting this sentiment is the continued inflow of funds into U.S. spot Bitcoin ETFs. The article states that, as of Wednesday, these products had experienced eight consecutive trading days of net inflows, accumulating $2.8 billion—the longest such streak since April.
Additionally, the U.S. Treasury announced that it will at least double the size of its long-term Treasury buyback program starting September 9. The article suggests that this move supports the previously weak long-end bond market, pushes down long-term yields and weakens the dollar, thereby reinforcing the macro narrative behind Bitcoin’s rise this month from approximately $62,000 to $80,000.
However, in the short term, the market will continue to be driven by inflation data and Federal Reserve statements. Warsh did not provide a clear interest rate path but emphasized that the Fed will not declare victory until inflation shows clear and sustained progress toward its target. This means that, ahead of the next rate decision, Bitcoin may still react sharply to each inflation data release.