Bitcoin (BTC) slipped about 0.7% over the past 24 hours to trade near $77,800 on Aug. 31, extending its pullback after another failed attempt to hold above $80,000. The digital asset's decline came as global markets adjusted to a higher likelihood of another Federal Reserve interest rate increase following Chair Kevin Warsh's hawkish remarks at the Jackson Hole symposium on Friday.
Warsh stated that inflation remains too elevated and signaled that additional tightening could be necessary to bring price growth back to the Fed's 2% target. Following his speech, the implied probability of a September rate hike climbed to roughly 57% on Monday, while the two-year U.S. Treasury yield touched its highest level in over a month. Barclays also revised its outlook, now expecting two 25-basis-point increases in September and December, a shift from its previous view that rates would stay unchanged through the end of 2026.
Higher yields weighed on other risk assets, with Asian equities falling on Monday and U.S. and European stock futures trading lower as investors braced for tighter monetary policy. Adding to the selling pressure over the weekend was renewed conflict between the U.S. and Iran. U.S. forces struck Iranian missile launchers on Larak Island, and Iran retaliated against U.S. forces in Jordan. Brent crude subsequently rose about 3.3% to $91.01 per barrel, intensifying inflation concerns at a time when markets were already pricing in a greater chance of another Fed rate increase.
Bitcoin entered this macro headwind after a strong August recovery had already stalled around $80,000. The cryptocurrency gained roughly 23% over the past month and briefly traded above $81,000 last week, but repeated attempts to establish support above the $80,000-$82,000 region failed. Selling accelerated early on Aug. 31 after Bitcoin reached about $79,300 late on Saturday and subsequently dropped below $78,000. The price briefly fell toward $77,300, then surged toward $78,600 before giving up those gains.
Leveraged positions have amplified the speed of the decline. Bitcoin futures open interest stood near $54.8 billion on Aug. 30, while roughly $390 million in crypto positions were liquidated over the past 24 hours, with long positions accounting for about 70% of the losses. Institutional demand also weakened before the weekend. U.S. spot Bitcoin exchange-traded funds recorded $201.8 million in net outflows on Aug. 28 after receiving $314.4 million on Aug. 25, $232.1 million on Aug. 26, and $242.2 million on Aug. 27, according to SoSoValue data. The funds remain at about $3.3 billion in net inflows for August despite Friday's reversal.
Bitcoin price analysis
Bitcoin's daily chart shows price holding well above all four major exponential moving averages despite the retreat from $80,000. On the 2-hour chart, Bitcoin was trading near $77,800, below its 20-period EMA at $78,207, 50-period EMA at $78,288, and 100-period EMA at $77,399, while remaining above the 200-period EMA at $74,572.
The setup suggests that short-term momentum has weakened, with Bitcoin trading below the 20- and 50-period averages. However, the price remains above the 100- and 200-period EMAs, leaving the broader recovery structure intact for now. A sustained break below the $77,400 area could expose Bitcoin to further downside toward the $74,600 200-period EMA. On the upside, a move back above the $78,200-$78,300 zone would bring the recent highs near $79,000-$80,000 into focus.
The Stochastic RSI has also retreated from overbought territory. The faster line is at 43.71, below the slower line at 46.56, indicating that near-term buying momentum has eased. A renewed move above $78,300 could signal improving momentum, while a deeper Stochastic RSI decline would reinforce the risk of further consolidation or a pullback. The bearish crossover shows that upside momentum has weakened while Bitcoin remains below $80,000.
The Directional Movement Index (DMI) is not currently showing a clear bearish trend. The positive directional indicator stands at 19.02, above the negative directional indicator at 15.40, while ADX is at 24.44. The readings suggest that buyers retain a slight directional advantage, although the relatively narrow gap between the two directional indicators points to limited conviction.
Bitcoin's inability to reclaim the $78,200-$78,300 area keeps that zone as an immediate resistance level. A sustained move above it could open the way toward $79,000 and the $80,000 psychological level. On the downside, the 100-period EMA around $77,400 is an important near-term support level. A break below it could expose the $76,000-$77,000 region, with the 200-period EMA near $74,600 providing a deeper support level.
The Williams %R reading is around -66.11, indicating that Bitcoin has moved back toward the lower portion of its recent trading range but is not yet in oversold territory. The indicator would need to fall below -80 to signal more pronounced oversold conditions. A recovery in Williams %R alongside a move back above the $78,200-$78,300 EMA cluster would indicate improving short-term momentum. Conversely, a move below -80, combined with a break under the $77,400 support, could increase the risk of a deeper pullback toward $76,000 and potentially the 200-period EMA.
For broader context, the recent market jitters from Iran tensions and oil price volatility have added to the risk-off tone, while leveraged unwinds in Asian markets highlight the fragility of risk assets. As always, investors should monitor these macro factors closely.
This article is for informational purposes only and does not constitute financial advice.
