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Bitcoin surrendered the $80,000 level again after Federal Reserve Chair Kevin Warsh’s keynote address at Jackson Hole. Warsh pledged to definitively return inflation to target, downplaying recent improvements in price indicators, and markets interpreted the remarks as a hawkish signal. Bitcoin fell as low as $76,871 at one point. However, analysts note that leverage expansion during the recent rally was limited and spot ETF inflows have continued, making it premature to conclude a trend reversal. The market is watching whether the 50-week moving average holds as support and how supply-demand dynamics shift after roughly $6.4 billion in options expire.
Key Elements
Bitcoin surrendered the $80,000 level once again in the wake of Federal Reserve Chair Kevin Warsh’s Jackson Hole speech. Warsh’s pledge to definitively return inflation to target signaled a cautious stance on monetary easing, dampening risk-asset sentiment.
According to Bloomberg on the 29th (local time), Bitcoin fell nearly 4% from the previous day to as low as $76,871 (approximately 110 million won). The cryptocurrency gave back the $80,000 level it had reclaimed last week.
The decline was directly triggered by Warsh’s first Jackson Hole keynote address. “Current financial conditions are not restrictive,” he said, adding that he would “definitively return inflation to target.” He downplayed recent Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) readings that came in below expectations, saying they “do not indicate a meaningful improvement in the underlying trend.”
Markets interpreted the remarks as a cautious signal on monetary easing. Short-term U.S. Treasury yields rose, applying selling pressure across risk assets including Bitcoin. U.S. equities, however, avoided losses as Warsh made positive remarks about corporate earnings and growth in the artificial intelligence (AI) sector. The S&P 500 and Nasdaq Composite both rose about 0.5% on the day.
Quality of the Rally Remains Solid…Leverage Expansion Limited
Analysts say it is premature to conclude that the recent price decline marks a trend reversal. Bitcoin is undergoing a correction after surging roughly 23% last week, as profit-taking and rate uncertainty converge. The current price remains above the low set earlier this month but is about 40% below the all-time high of roughly $126,000 (approximately 170 million won) recorded last October.
Jasper De Maere, an over-the-counter (OTC) trader at crypto trading firm Wintermute, said Warsh’s remarks were “somewhat hawkish but the market is digesting them relatively well,” adding that they were “broadly in line with market expectations.”
Market participants are noting that leverage did not expand significantly during the recent rally. Last week’s sharp price surge triggered a short squeeze that forcibly liquidated positions of investors betting on declines, but open interest in the futures market has not recovered to previous levels since.
Typically, a rapid increase in open interest alongside a price surge signals that new leveraged capital is flowing in. In this rally, however, the limited increase in open interest suggests that excessive leveraged buying did not drive the price appreciation.
Trading firm QCP Capital also emphasized the importance of derivatives market dynamics. “Even if prices continue to rise, if funding rates remain subdued and open interest rebuilds gradually, that signals a different market structure from one where leverage accelerates sharply alongside price,” the firm noted. It added: “The key distinction is not whether Bitcoin trades above $83,300, but whether subsequent price action is supported by spot participation or increasingly driven by leveraged positions.”
Options Expiry and Technical Support in Focus
Demand for upside bets continues in the derivatives market. On Deribit, the world’s largest crypto options exchange, position adjustments are underway ahead of the expiry of approximately $6.4 billion (about 8.8 trillion won) in Bitcoin options. As Bitcoin climbed from around $62,000 (approximately 85 million won) to $80,000 recently, demand for call options betting on further upside has increased relative to put options hedging against price declines.
Alex Blum, CEO of Two Prime, said the options expiry “will be a watershed moment for repositioning sidelined buying interest,” adding that “whether the bullish trend continues will depend on whether the call option skew persists.”
Technically, the 50-week moving average is cited as a key support level. Mostafa Al-Mashita, co-founder of Secure Digital Markets, said “the key going forward is whether the 50-week moving average holds,” adding that “prices need to close above this line on a weekly basis for the bullish structure to remain intact.” He added that “altcoins will also be directly affected by Bitcoin’s movements.”
Meanwhile, inflows into U.S. spot Bitcoin exchange-traded funds (ETFs) continued for a ninth consecutive trading day. Cumulative net inflows from the 17th through the 27th reached $3.0442 billion (approximately 4.2 trillion won). On-chain analytics firm Glassnode noted that $2.23 billion (approximately 3.1 trillion won) flowed into U.S. spot Bitcoin ETFs during the rebound period, marking the strongest inflow streak of the year. However, sentiment indicators remain at relatively subdued levels compared to the pace of price appreciation, suggesting that gradual accumulation rather than short-term overheating characterizes this rally.
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Source: finance.biggo.com