Bitcoin slips below $80,000, short-term trend at crossroads

Bitcoin slipped to around $78,000, making whether it can hold $77,000 a key variable that could determine the short-term direction.

On Aug. 29, local time, blockchain media outlet CryptoSlate reported that the market is gauging direction between support at $77,000 and resistance at $80,000.

If Bitcoin clearly falls below $77,000, the next downside could open toward the mid-$75,000s. If it regains $80,000, it could retest $81,300, the Aug. 28 high, and then potentially move toward the $82,000 to $83,000 range.

The pullback came after an intraday attempt to break above $81,000 on Aug. 28 failed. After Federal Reserve Chair Kevin Warsh's Jackson Hole remarks, the market-implied probability of a September rate hike rose to about 55 percent from about 40 percent. Warsh said the Fed still has work to do if inflation does not return to target. The $80,000 level, briefly reclaimed, turned back into resistance.

There was also a shift in weekend flow conditions. On Aug. 29, about 81,700 BTC of bitcoin options expired on Deribit. The notional value was about $6.44 billion. The put-to-call ratio was 0.83, and call open interest was most concentrated at $75,000 and $80,000.

Inflows through spot bitcoin exchange-traded funds also halted over the weekend. Spot ETFs recorded net inflows for 9 consecutive trading days through Aug. 27, bringing in about $3 billion over that period. Because ETF creation and redemption take place only on weekdays when U.S. stock markets are open, a key demand channel that had supported the recent rise temporarily stopped over the weekend.