BTC surrendered some of its gains after Fed Chair Kevin Warsh took a firm stance on inflation, but prediction market traders remain broadly bullish.
Bitcoin slipped to $76,877 on Friday, erasing much of its double-digit weekly advance after Fed Chair Kevin Warsh warned in his first Jackson Hole keynote that inflation was not slowing quickly enough.
The decline followed an overnight high of $81,455, which sat within the resistance zone that had already capped several earlier breakout attempts this year. That zone held once again.
Warsh marked his 100th day in office by offering markets no fresh guidance, but his tone was enough to move prices. In his keynote, Warsh set a clear standard for the Fed, saying inflation must move toward its target clearly and fast enough before the central bank can declare victory. Until then, he said, the central bank still has “work to do.”
Traders interpreted the remarks as hawkish. According to the CME Group’s FedWatch tool, September rate-hike odds climbed to 55.7% from 35.4% the previous day.
The reaction spread across leveraged positions. CoinGlass data showed roughly $481 million in liquidations across the crypto market during the 24 hours surrounding the speech, with more than $360 million coming from long positions caught off guard by the decline. Bitcoin ended the day at $77,557, down 3.39%.
Bitcoin Price Analysis: What the Charts Reveal
Technically, the pullback appears more like consolidation than a reversal. The Relative Strength Index sits at 69.7, well below the overbought level above 80 that preceded Tuesday’s rejection, while the Average Directional Index near 39.5 continues to signal a strong trend rather than a breakdown. Price remains within the bullish move from the June low near $68,858 to this week’s high around $81,455.
The $73,670 to $75,157 range forms the key golden zone traders are likely to monitor if the selloff continues. A close below that area would put the 50-week moving average and June’s breakout structure under pressure. Above the market, the $81,000 to $82,500 zone remains the key level bulls need to reclaim to pursue fresh highs.
The Long-Term View: What Myriad Bettors Are Pricing In
This is where the longer-term bullish case remains strongest. Myriad’s “BTC next move” market has operated since late February, with $231,000 in trading volume and no fixed resolution date. The two outcomes, a move toward $84,000 or a decline to $55,000, have repeatedly traded the lead since spring as price action swung sharply throughout the year.
That back-and-forth shifted decisively this month. The $84,000 scenario has climbed 31.7 percentage points to 77%, compared with 23% for the $55,000 outcome, while Friday’s rejection at resistance has not changed that divide.
The last time predictors showed this level of bullish sentiment was around April.
The fundamental case for higher prices remains intact. US spot Bitcoin ETFs attracted $2.8 billion across eight consecutive days of inflows through Wednesday, marking their longest streak since April.
That demand can be traced to a Treasury Department announcement that it would at least double long-dated bond buybacks starting Sept. 9, supporting a segment of the bond market that has faced weak demand since June. Lower long-term yields and a softer dollar revived the “debasement trade,” which fueled Bitcoin’s rise from roughly $62,000 to $80,000 this month.
Warsh’s remarks left that backdrop intact, as he provided no specific rate path and instead highlighted a condition the Fed has yet to meet.
Bitcoin Bears Are Sending a Warning to Traders
In the short term, the setup still calls for caution. Warsh’s push to abandon forward guidance means traders will receive no clear signal until the Fed’s next rate decision, leaving Bitcoin vulnerable to headline-driven swings with each inflation report in the meantime.
The PCE price index is currently running at 3.7% annually, nearly twice the Fed’s 2% target, while Warsh offered no timeline for when inflation might return to that level.
Resistance has now turned back several attempts in recent months, while Warsh gave bulls little reason to expect the Fed to make the next bullish test any easier.
