Bitcoin Holds Under $78,000 as Warsh Keeps Inflation Risks in Focus
Bitcoin traded near $79,300 on August 28 after Federal Reserve Chair Kevin Warsh used his Jackson Hole address to keep inflation firmly at the center of U.S. monetary policy.
Summary:
- Bitcoin retreated below $78,000 after Kevin Warsh’s Jackson Hole speech.
- The Fed chair said underlying inflation has not improved enough to ease concern.
- Crypto liquidations reached $280.10 million over the past 24 hours.
- Bitcoin’s four-hour RSI fell to 54.99 as momentum weakened near resistance.
The move below $78,000 came as traders weighed persistent price pressures against resilient economic growth, while $280.10 million in crypto liquidations showed how quickly leveraged positions were being reset around the macro event.
Warsh gives markets little reason to expect easier policy
Warsh stopped short of signaling a specific interest-rate decision, describing his approach as a commitment to policy discipline rather than a predetermined move. That distinction matters because the Fed chair also argued that current inflation readings remain inconsistent with the central bank’s 2% objective.
The 12-month PCE inflation rate stands at 3.7%, while the six-month change is running at 4.1%. Price pressures also remain broad: 54% of the 199 components in the PCE basket increased by more than 3% over the past year, compared with 32% during the two decades before the pandemic.
At the same time, Warsh described an economy offering few signs of broad monetary restraint. Real consumer spending has risen more than 2% over the past four quarters, private domestic final purchases have expanded at nearly a 3% pace this year, and the unemployment rate remains at 4.1%. Business investment in equipment and intangible assets is growing at roughly 9%, its fastest four-quarter pace since 2021.
That combination complicates the case for easier policy. With employment stable and demand holding up, the Fed has greater scope to keep rates restrictive if inflation does not cool sufficiently.
For Bitcoin, the transmission mechanism runs through financial conditions. Higher expected policy rates can support bond yields and increase the relative appeal of interest-bearing assets, while tighter liquidity tends to make leveraged positions in crypto more expensive to maintain. Warsh’s reluctance to provide explicit forward guidance also leaves upcoming economic releases with greater influence over rate expectations.
Bitcoin leads a mixed crypto market below $80,000
Bitcoin had fallen further, trading at $77,832.40, down 2.89% over 24 hours and leaving its seven-day gain at just 1.19%. Weakness had spread across most major cryptocurrencies. Ethereum declined 2.70% to $2,453.37, while XRP lost 3.93% to $1.40. Solana remained one of the strongest large-cap performers on a weekly basis, holding a 15.55% gain despite falling 1.82% over the day.
Total crypto market capitalization stood at approximately $2.67 trillion, down 1.05%, while the Fear & Greed Index remained at 81, firmly inside “Extreme Greed.” The combination suggests that Friday’s losses had not yet produced a broad retreat in investor sentiment.
$280 million in liquidations exposes two-way leverage
Derivatives markets experienced considerably more disruption than the spot-market decline alone would suggest.
CoinGlass data showed $280.10 million in liquidations over 24 hours across 73,295 traders. Long positions accounted for $154.64 million, exceeding the $125.46 million in shorts. Bitcoin generated $94.57 million of the total, followed by Ethereum at $46.08 million and Solana at $30.74 million.
READ MORE: Bitcoin Moves Closer to Gold as Its Nasdaq Connection Weakens
The balance changed over shorter periods. During the latest hour, $25.49 million of short positions were liquidated compared with only $4.16 million of longs. Over four hours, however, long liquidations reached $53.39 million against $38.23 million in shorts.
Those shifts point to a market repeatedly clearing leverage on both sides rather than a straightforward rush for the exits. The largest individual liquidation was a $2.18 million BTC-USD position on Hyperliquid.
Bitcoin’s $78,400 support comes into focus
Bitcoin’s four-hour setup deteriorated again in the latest TradingView snapshot, with BTC falling to $77,832.48 at 16:14 UTC after opening the candle at $78,324.22. The move extended the break below the earlier $78,400 support area, while the candle’s low reached $77,820.
That keeps $77,500 as the first nearby support zone, followed by the $77,000 area. If selling pressure deepens, the next broader region to watch sits around $76,000-$76,500, where Bitcoin previously found demand before the rebound toward $80,000.
On the upside, the failed $78,400-$78,500 zone now becomes the first resistance to reclaim. Above that, traders would likely focus on $79,000-$79,500, with $80,000 remaining the more important threshold after repeated rejection from higher levels.
Momentum has weakened further. The four-hour RSI dropped to 44.25, while its moving average stands at 57.99. The move below 50 confirms that short-term momentum has shifted toward sellers, but the reading is still above the 30 level typically associated with oversold conditions.
The latest chart therefore shows a cleaner bearish short-term structure than the previous snapshot: price has lost former support, RSI has slipped deeper below its average, and buyers have yet to establish a convincing response below $78,000.
September data will determine how markets interpret Warsh’s stance
Warsh’s Jackson Hole speech reduces the value of trying to infer the next Fed decision from a single policy signal. He explicitly argued against relying heavily on forward guidance and said policymakers should assess trends rather than isolated data points.
That places greater weight on the economic releases arriving before the next FOMC decision. Inflation remains the more pressing side of the Fed’s mandate, while Warsh currently views the labor market as consistent with full employment and broad financial conditions as difficult to characterize as restrictive.
For crypto markets, the next concrete question is therefore not whether Jackson Hole was categorically hawkish or dovish. It is whether incoming inflation data give the Fed enough evidence that underlying price growth is moving toward 2% “clearly and at sufficient speed,” the standard Warsh set in Wyoming. Until that evidence arrives, Bitcoin’s ability to hold the $78,400 area while sentiment remains elevated will provide a more immediate measure of how much macro uncertainty the recent rally can absorb.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Zdravkov
Reporter at CoinsPress
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
