Bitcoin drops to $76,877 after hawkish Jackson Hole speech

Bitcoin gives up weekly gains after Fed Chair speech

Bitcoin fell as low as $76,877 on Friday, erasing most of its weekly gain after Federal Reserve Chair Kevin Warsh spoke at Jackson Hole. The drop came from an overnight high of $81,455, a level that has blocked previous attempts by Bitcoin to push higher this year.

Warsh marked his 100th day in the job by avoiding specific guidance on future interest rate moves. Instead, he stated that the Fed needs to see inflation moving clearly and quickly toward its 2% target before it can consider its work finished. He said the central bank still has "work to do."

Traders interpreted the remarks as a warning that interest rates might stay higher for longer. Data from the CME Group showed the chance of a rate hike in September rose to 55.7%, up from 35.4% the day before.

Key numbers from the selloff

• Bitcoin dropped to $76,877, closing the day at $77,557, down 3.39%.
• Approximately $481 million in crypto positions were liquidated in 24 hours, with over $360 million coming from long bets that lost value.
• September rate-hike odds jumped to 55.7% from 35.4%.
• The PCE price index, a key measure of inflation, remains at 3.7% annually, nearly double the Fed’s target.

What charts and traders are showing

Technical analysts noted that the pullback looks more like a pause than a full reversal. The Relative Strength Index, a tool that measures whether an asset is trading too high or too low relative to recent history, sits at 69.7, below the overbought zone above 80 that preceded Tuesday’s rejection.

If the selling continues, traders will watch the $73,670 to $75,157 range as a support level. A break below that could challenge the 50-week moving average. On the upside, Bitcoin would need to reclaim the $81,000 to $82,500 range to test new highs.

Despite the short-term drop, long-term sentiment on prediction platform Myriad remains bullish. In the "BTC next move" market, 77% of traders are betting Bitcoin will reach $84,000 next, while only 23% expect a drop to $55,000. That split has not changed since Friday’s selloff.

ETF inflows and the debasement trade

U.S. spot Bitcoin ETFs, which are funds that allow investors to buy Bitcoin without holding it directly, pulled in $2.8 billion over eight straight days of inflows through Wednesday. This was the longest streak of growth since April.

The optimism is partly linked to a U.S. Treasury Department plan to double its long-dated bond buybacks starting September 9. This move is expected to support weak demand in that part of the bond market. Lower long-term yields and a softer dollar have fueled what traders call the "debasement trade," a strategy of buying assets like Bitcoin that are seen as hedges against currency devaluation. Bitcoin climbed from roughly $62,000 to $80,000 this month as that trade gained momentum.

Why this matters for investors

Warsh’s refusal to give a clear timeline for rate cuts leaves Bitcoin exposed to volatility. With no forward guidance, every inflation report between now and the next Fed decision could trigger sharp price swings. The resistance at $81,000 has rejected multiple breakout attempts this year, and Warsh’s comments gave buyers no reason to expect the Fed will make the next attempt easier.

Sources

• Decrypt