Bitcoin’s Rally Faces Fresh Test as Rate Fears Grow: Bitfinex

Fresh ETF demand is supporting Bitcoin, but changing U.S. rate expectations could shape its next move.

Bitcoin’s August rally is facing a tougher test as fresh ETF demand meets growing expectations for tighter U.S. monetary policy. The cryptocurrency is holding above $77,100, but its next move may hinge on whether fresh liquidity can offset rising rate risks, according to Bitfinex Alpha.

This tension was evident in Bitcoin’s recent price action. Bitcoin closed above $80,000 on August 27 for the first time since May, ending at $80,256 after briefly reaching $81,500. It later fell to $76,857 after Federal Reserve Chair Kevin Warsh’s Jackson Hole remarks pushed markets to reassess the outlook for U.S. rates.

Bitcoin Holds Up Despite Rate Fears

The pullback came as markets raised the implied probability of a September rate increase from the mid-30% range to about 60%. Warsh also stressed the Federal Reserve’s 2% inflation target and suggested that monetary policy may not yet be restrictive enough.

Despite the shift in rate expectations, Bitcoin showed some resilience. It closed Friday only about 3% lower and remained above previous range highs through the weekend. Bitfinex identified $77,100 as an important volume-node support level after it helped define the cryptocurrency’s August breakout.