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Cryptocurrency markets traded broadly weaker on the morning of the 31st, with Bitcoin pushed back to the $77,000 range. The primary catalyst was Fed Chair Kevin Warsh’s speech at the Jackson Hole Symposium over the prior weekend, where he explicitly characterized the 2% inflation target as “fixed” and signaled he does not view summer disinflation as a fundamental improvement. This drove September rate hike expectations sharply higher from roughly 40% to approximately 60%. 24-hour trading volume remained robust at approximately $14.93 billion, and the Fear & Greed Index held at 69, still in “greed” territory. The next key focus is the September 15–16 FOMC meeting, with rate dynamics continuing to dictate the trajectory of crypto markets.
Key Elements
The cryptocurrency market traded broadly softer on the morning of the 31st. Bitcoin changed hands at approximately ¥12.4 million (approximately $77,000) per BTC, down 0.7% over the past 24 hours, while Ethereum was down 1.7% at around ¥380,000 (approximately $2,400), and XRP fell 2.8% to the upper ¥210 range. Selling pressure that began the prior weekend remained persistent, underscoring a clear shift toward caution among investors.
The dominant catalyst was Fed Chair Kevin Warsh’s speech at the Jackson Hole Symposium on August 28. He explicitly stated that the PCE inflation target of 2% is a “fixed target” and expressed the view that monetary policy should remain focused squarely on price stability. Markets interpreted the remarks as hawkish, rapidly strengthening expectations for a September rate hike.
Looking at actual price action, Bitcoin had been trading around $80,000 during the day on the 28th before selling intensified late at night, breaking below $78,000 in the early hours of the 29th. On Bitstamp, the cryptocurrency fell as low as $78,442 at one point. While dip-buying subsequently supported a recovery back to the $79,000 range, sellers regained the upper hand in the early hours of the 31st, pushing Bitcoin back down to the $77,000 level.
Rate Hike Expectations Strengthen Despite Summer Disinflation
The market’s biggest focus was how Warsh would assess the softer inflation data released over the summer. The U.S. Consumer Price Index (CPI) for July rose 0.1% month-over-month and 3.4% year-over-year, moderating from June’s 3.5% pace. The core PCE deflator, the Fed’s preferred gauge, rose 3.3% year-over-year, while headline PCE came in at 3.7%.
However, Warsh took the position that these figures do not demonstrate a fundamental improvement in underlying inflation. He reportedly pointed to the six-month annualized PCE rate running at approximately 4.1%, arguing that a single month of softness is insufficient to determine whether prices are sustainably returning to target.
Rate futures markets moved sharply in response. The implied probability of a September rate hike jumped from roughly 40% before the speech to approximately 60% afterward. If rate cut expectations recede, the relative appeal of Bitcoin—a non-yielding asset—diminishes. The latest decline is precisely the result of this logic being rapidly absorbed across the market.
Market Sentiment Remains in Greed Territory After Selloff
That said, the current decline is not driven by protocol-specific or company-specific negative developments, but rather a sentiment-led correction stemming purely from macro factors. Bitcoin’s 24-hour trading volume reached approximately $14.93 billion (approximately ¥2.4 trillion), indicating that the price was not crushed amid thin liquidity but rather re-rated with substantial trading activity.
Overall market positioning also remains tilted bullish. Bitcoin’s market capitalization is hovering around $1.57 trillion (approximately ¥251.4 trillion), and the Fear & Greed Index—often referred to as a fear gauge—held at 69, remaining in “greed” territory. This suggests investors have not shifted to a defensive posture during the downturn.
Louis Navellier, founder of the eponymous investment management firm, praised Warsh’s speech, saying the Fed chair “delivered a superb speech at Jackson Hole this week.” Meanwhile, some desks have expressed the view that near-term upside is limited. According to unconfirmed reports citing a QCP Capital note, Bitcoin would need funding rates to remain contained and open interest to be rebuilt gradually in order to sustain levels around $83,300.
The next key milestone is the FOMC meeting scheduled for September 15–16. Whether rate hike expectations strengthen further or recede will depend on economic data released in the interim, and this will determine the direction of cryptocurrency markets. For the time being, macro conditions surrounding interest rates—rather than crypto-specific catalysts—are likely to continue dictating Bitcoin’s price action.
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Source: finance.biggo.com