Bitcoin drops after Warsh speech as hike odds hit 57% – Can BTC reclaim $80K?

Bitcoin price dropped by 3% to $77K following Fed Chair Kevin Warsh’s hawkish speech during the Jackson Hole event. 

In his speech, Warsh signalled that the Fed was far from done with fighting inflation, despite recent macro readings. 

We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.

For the Summer inflation prints, Warsh added,

While this summer’s PCE and CPI readings were better than expected, they do not tell me that underlying trends have meaningfully improved.

Why did Bitcoin fall below $80K?

U.S. equities and crypto markets interpreted Warsh’s remarks as hawkish.

The tech-heavy Nasdaq fell 0.52%, while the S&P 500 declined 0.25%. Crypto followed, led by Bitcoin’s 3% drop.

The crypto asset rallied 30% in H2 of August, thanks to the Treasury’s planned $1T intervention to curb rising bond yields. Interestingly, the upswing helped BTC reclaim the crucial 200-day Moving Average (MA).

But the rally has since stalled below $80K, delaying it from reclaiming the 50-week MA ($81.8K) to officially mark the end of the BTC bear market cycle.

So, how will BTC navigate the hawkish Fed and the so-called “debasement trade” as Q3 comes to a close?