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Bitcoin crossed $80,000 for the first time since May but failed to hold the level, sliding back to the $77,000 range within a day. U.S. spot Bitcoin ETFs, which had fueled the rally, posted net outflows of $201.9 million on August 28, snapping a nine-session inflow streak. Fed Chair Kevin Warsh’s hawkish Jackson Hole remarks drove the probability of a September rate hike to 55.7%, while $6.4 billion in Bitcoin options expiries and $486 million in liquidations amplified volatility. Technically, $78,670 is identified as the key resistance level that will determine Bitcoin’s next direction.
Key Elements
Bitcoin breached $80,000 for the first time in roughly three months but couldn’t hold the level for even a day, sliding back into the $77,000 range. The U.S. spot Bitcoin exchange-traded fund (ETF) flows that had powered the rally also flipped to net outflows after nine consecutive sessions of inflows.
As of 1:30 p.m. on August 31, Bitcoin had fallen to $77,461 before trading around $77,600 by 2 p.m. The cryptocurrency had crossed $80,000 on August 27 for the first time since May but failed to sustain the gains
Alongside the price pullback, institutional fund flows reversed direction. According to Farside Investors, U.S. spot Bitcoin ETFs saw total net outflows of $201.9 million (approximately 280 billion won) on August 28, ending a nine-session inflow streak that ran from August 17 through August 27.
The buying pressure had been intense leading up to the reversal. During that period, U.S. spot ETFs attracted a cumulative $3.0442 billion (approximately 4.2 trillion won), with a single-day inflow of $606.3 million (approximately 830 billion won) on August 20 alone. Bitcoin’s price surged from the $64,000 range to above $80,000 during that stretch.
The single-day outflow represents roughly 6.6% of the cumulative inflows over the prior nine sessions. Given that prices surged more than 20% in a short period, profit-taking redemptions near the highs appear likely. The relatively small redemption share from IBIT also supports the interpretation that this was short-term profit realization rather than broad institutional exit.
Hawkish Fed Remarks Dampen Investor Sentiment
Comments from U.S. Federal Reserve Chair Kevin Warsh also weighed on the market. In his keynote address at the Jackson Hole symposium on August 28, Warsh emphasized that the personal consumption expenditures (PCE) price index was running at 3.7% year-over-year and 4.1% on a six-month annualized basis, stressing that the Fed still has work to do.
Markets interpreted the remarks as leaving the door open for further rate hikes. According to the CME FedWatch Tool, the probability of a rate hike at the September Federal Open Market Committee (FOMC) meeting jumped from 35.4% before the speech to 55.7% afterward, spiking as high as 60% intraday.
Gold prices fell 2.4%, and U.S. equities gave back early gains. Bitcoin climbed to $81,455 before plunging to $76,845 and closing near $77,800.
Options Expiry and Liquidations Amplify Volatility
Large-scale derivatives expiries also fueled volatility. On August 28, approximately 81,700 Bitcoin options contracts worth $6.4 billion (approximately 8.8 trillion won) expired on Deribit, the global crypto derivatives exchange. The rapid short-term rally had concentrated option positioning around the $75,000 and $80,000 levels.
According to CoinGlass, roughly 95,731 traders suffered liquidations totaling $486 million (approximately 670 billion won) on August 28, with long position liquidations accounting for $368 million (approximately 510 billion won). Altcoins fell even harder. Ethereum dropped 2.70% to $2,443, while Solana slid 4.65% to $104.13 and XRP declined 4.80% to $1.3833.
Ethereum spot ETFs showed a contrasting trend, posting net inflows of $102 million (approximately 140 billion won) on the same day, extending their inflow streak to ten consecutive sessions.
$78,670 Is the Key Level
Technically, Bitcoin is currently capped at the $78,670 level, which coincides with the resistance that limited upside momentum in early May. At that time, Bitcoin traded sideways near this level for two weeks before losing support and sliding to the low $60,000 range by June.
There are notable differences this time, however. In May, the 200-day exponential moving average (EMA) sat above the price; it now sits at $72,170, acting as support below current levels. The daily relative strength index (RSI) stands at 71.03, entering overbought territory, and has already broken below its own moving average of 74.90.
The rapid ascent over the past two weeks has created a volume “void” between $68,000 and $76,000. This zone offers weak support on the downside, meaning prices could fall quickly through it, but it also presents minimal resistance on the upside, leaving room for sharp rallies.
For upside continuation, Bitcoin needs to break above $78,670 on a daily closing basis with volume. A breakout would target $81,455 as the first objective, followed by $88,000 as the next resistance level. The $100,000 mark remains an optimistic scenario. Standard Chartered’s Geoff Kendrick has suggested the bank’s year-end target may be too conservative, but achieving it would require inflation data to cool before September 16, prompting a shift in the Fed’s stance.
On the downside, $74,450 serves as the first support level. Holding this level would keep the uptrend intact. The critical line is the 200-day EMA at $72,170. Losing this level would signal that August’s rally was merely a bear market bounce. Below that, the $66,803 to $65,000 zone and then $62,277 are expected to provide successive support. Glassnode has warned that while selling pressure appears exhausted, buying demand is absent, and a break below $58,500 could open the door to a deeper decline.
An industry Bitcoin’s momentum to reclaim $80,000 could weaken.”
Market participants are closely watching ETF flows from Monday through Wednesday this week. Whether outflows continue or prove to be a temporary correction will determine the short-term direction. The crypto fear and greed index registered 72 on August 28, well above its 30-day average of 42. With positioning having tilted rapidly to one side, analysts note that even minor catalysts could trigger outsized volatility.
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Source: finance.biggo.com