Bitcoin fell about 0.7% over the past 24 hours to around $77,800 on Aug. 31, extending a retreat after failing to hold the $80,000 area. The latest drop came as investors increased expectations for another Federal Reserve rate hike, pressuring risk assets and contributing to renewed volatility in crypto.
According to market pricing, the probability of a September rate increase rose to roughly 57% by Monday, while the two-year US Treasury yield climbed to its highest level in more than a month. In parallel, renewed US-Iran tensions over the weekend added to selling pressure, as higher oil prices—Brent rose about 3.3% to $91.01 per barrel—reignited inflation concerns at a time when rates risk was already rising.
Key takeaways
- Price move: Bitcoin slipped to around $77,800, after failing to sustain levels above $80,000.
- Catalyst: Fed rate-hike expectations increased following Chair Kevin Warsh’s Jackson Hole remarks, while geopolitical developments between the US and Iran also weighed on sentiment.
- Crypto-specific pressure: Liquidations and a cooldown in spot ETF flows added to the speed of the decline.
- Implication for traders: A breakdown below key near-term support could draw selling toward longer-term moving-average levels.
What drove the move
Global markets repriced monetary policy risk after Kevin Warsh said inflation remained too high and that additional tightening might be necessary to bring it back to the Federal Reserve’s 2% target. Following the speech, the implied odds of a September rate increase climbed to about 57%, according to the article’s market-based framing.
Barclays also updated its outlook, moving to a projection of two additional 25-basis-point increases—one in September and another in December—after previously expecting policy to remain unchanged through the end of 2026. The shift matters for Bitcoin because higher Treasury yields typically raise discount-rate assumptions and tighten financial conditions for growth and speculative assets.
On the geopolitical front, the report cited renewed conflict between the US and Iran. US forces struck Iranian missile launchers on Larak Island, followed by retaliatory Iranian attacks against US forces in Jordan. That sequence coincided with a rally in Brent crude, which the article linked to renewed inflation concerns.
Market reaction: yields, equities and crypto liquidity
Higher Treasury yields spilled into broader risk sentiment. The article said Asian equities fell on Monday and that US and European stock futures were trading lower as markets adjusted to the prospect of tighter monetary policy.
Within crypto, the move was amplified by leverage. The report noted that Bitcoin futures open interest was near $54.8 billion as of Aug. 30, and that about $390 million in crypto positions were liquidated over the prior 24 hours, with long positions accounting for roughly 70% of those losses. Such dynamics can accelerate declines when price slips below commonly watched support levels.
Institutional demand also appeared to soften ahead of the weekend. Data referenced from SoSoValue showed US spot Bitcoin exchange-traded funds recorded $201.8 million in net outflows on Aug. 28, following net flows of $314.4 million on Aug. 25, $232.1 million on Aug. 26, and $242.2 million on Aug. 27. Even with the reversal, the article stated that funds were still about $3.3 billion in net inflows for August.
Technical picture: key levels traders are watching
According to the report’s technical read-through, Bitcoin’s daily structure remained above all four major exponential moving averages despite the pullback from the $80,000 area. On the 2-hour chart, Bitcoin traded near $77,800, below the 20-period EMA at $78,207 and the 50-period EMA at $78,288, while still above the 100-period EMA at $77,399. The 200-period EMA was cited near $74,572.
The analysis suggested short-term momentum has weakened because price was below the 20- and 50-period averages, even as the broader recovery structure stays intact for now. It highlighted the $78,200 to $78,300 zone as immediate resistance; regaining that range could bring earlier highs near $79,000 to $80,000 back into view.
On the downside, the article pointed to the importance of the roughly $77,400 area tied to the 100-period EMA. It warned that a sustained break below $77,400 could expose Bitcoin to the $74,600 level associated with the 200-period EMA.
Momentum indicators also signaled fading enthusiasm. Stochastic RSI was described as retreating from overbought conditions, with the faster line at 43.71 below the slower line at 46.56, implying eased near-term buying pressure. Williams %R was around -66.11, indicating Bitcoin had moved back toward the lower portion of its recent trading range but had not reached oversold territory; the report said a fall below -80 would be needed to suggest more pronounced oversold conditions.
On trend strength, the report said the Directional Movement Index did not point to a clear bearish trend: the positive directional indicator stood at 19.02 versus the negative at 15.40, with ADX at 24.44. The narrow gap between the two directional indicators was framed as evidence of limited conviction, even though buyers retained a slight edge.
Bigger picture: rates and geopolitics remain the dominant drivers
Bitcoin’s pullback on Aug. 31 reflects the latest intersection of macro and liquidity. With markets increasingly pricing further Fed tightening and yields moving higher, the asset has faced a less supportive environment. At the same time, renewed tensions involving the US and Iran have contributed to an oil price move that can reinforce inflation sensitivity—another factor investors watch for future rate decisions.
Going forward, traders will likely focus on whether Bitcoin can reclaim the $78,200 to $78,300 area and hold above the $77,400 support zone. The next key signals will come from further Fed communication and upcoming US economic data that could shift expectations for the timing and magnitude of any additional rate increases.
