Bitcoin Retreats From $80,000 as Fed Policy Signals Hold the Key to Next Breakout

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Bitcoin pulled back from the $80,000 level after rallying from roughly $64,000 to above $79,000, trading near $76,900 as short-term bearish divergence signals emerged. Analysts say a sustained breakout above $80,000 will likely require the Federal Reserve to clearly signal an end to monetary tightening. Moderate US inflation and a softening labor market have reduced rate-hike expectations, while declining short-term Treasury yields and elevated 30-year yields reflect easing policy bets alongside fiscal concerns. The rally was fueled partly by short liquidations, and on-chain data shows large investors accumulating again. Long-term monthly charts still support upside scenarios with Fibonacci extension targets ranging from $162,346 to $589,837, though deeper corrective levels down to $56,858 remain possible if Bitcoin fails to extend its recovery.

Key Elements

Bitcoin pulled back from the $80,000 threshold this week, leaving traders to weigh whether the next leg higher depends on clearer signals from the Federal Reserve that monetary tightening has run its course. The cryptocurrency climbed from roughly $64,000 to above $79,000 before stalling, and was trading near $76,900 at the time of writing.

While the rally has rekindled optimism across digital assets, analysts caution that a decisive move above $80,000 will likely require confirmation from the Fed that policy risks are easing. CoinShares noted that the advance was driven more by macroeconomic conditions than by crypto-specific developments, citing moderate US inflation and a softening labor market as factors that have reduced expectations for further rate hikes.

The firm pointed out that although the latest FOMC minutes contained hawkish undertones, subsequent economic data weakened the case for additional tightening. Bitcoin, which is highly sensitive to liquidity expectations and shifts in real interest rates, reacted strongly to those signals. Short-term Treasury yields have declined, indicating that investors no longer anticipate further hikes, while elevated 30-year yields suggest lingering concerns about the US fiscal outlook and public debt sustainability.

CoinShares said that the combination of easing monetary policy expectations and long-term bond market stress has historically created a favorable environment for Bitcoin. The firm also suggested that any intervention by the US Treasury in the long-end of the curve could prove more forceful than markets currently anticipate.

The recent upswing was partly fueled by large-scale short liquidations, and on-chain data indicates that large investors have resumed accumulating. Still, CoinShares expects $80,000 to remain a critical ceiling unless the Fed explicitly confirms a shift in its policy stance.

Short-Term Technicals Flash Caution

On shorter timeframes, bearish signals are emerging. Analyst Jesse Olson highlighted a bearish divergence on Bitcoin’s one-hour chart, with the price retreating from nearly $79,000 to around $76,940 as momentum weakened. The chart shows a rounded top followed by a 1.9% hourly decline, suggesting buyers may be losing control.

Initial support sits near $76,000. A decisive break below that level could expose further downside zones around $73,500, $72,000 and $69,500. Weakness in Bitcoin could also amplify selling pressure across more volatile altcoins. The bearish setup would be invalidated if Bitcoin reclaims $78,000 and pushes above $79,000, but until then, losing the $76,000 support would provide stronger confirmation of a broader correction.

Long-Term Structure Still Supports Upside Scenarios

Despite the near-term caution, Bitcoin’s monthly chart keeps higher-price scenarios in play. More Crypto Online outlined two long-term counts that remain compatible with another price extension. A sustained advance from current levels would favor bullish structures marked on the chart, with the first major upside reference near the 61.8% Fibonacci extension at roughly $162,346. Above that, additional levels sit around $230,544 at the 78.6% extension, $360,388 at 100% and $589,837 at 123.6%.

These are long-range technical projections rather than immediate price targets, and Bitcoin would need to establish a sustained higher trend before the upper levels become relevant. The chart also keeps a substantial corrective scenario in view. Its lower Fibonacci zone begins near $56,858 at the 38.2% retracement, followed by approximately $44,402 at 50%, $34,675 at 61.8% and $24,385 at 78.6%. Those levels outline potential support areas if the broader structure develops into a deeper correction instead of extending directly higher.

For now, continued upside remains the key confirmation signal. A sustained move higher would strengthen the long-term bullish counts, while renewed weakness toward the lower retracement zone would shift attention back to the corrective structure.

Key Levels to Watch

Note: Levels reflect technical analysis from multiplee targets

The practical takeaway is that long-term bullish scenarios remain possible, but they depend on Bitcoin extending its recovery rather than rolling back toward major Fibonacci support levels. The market’s next directional cue will likely come from the Fed’s communication on monetary policy, with traders watching whether the central bank validates the easing expectations that have underpinned Bitcoin’s latest advance.

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Source: finance.biggo.com