Daily News 19

Tag: Crypto market liquidations

  • Bitcoin Price Correction: Why BTC Stalled at $78,000 Again

    Bitcoin Price Correction: Why BTC Stalled at $78,000 Again

    Bitcoin rose 26% in less than two weeks to reach $81,455 before stopping at the same price level that ended its previous rally. As of Sunday, 30 August at 11:37 UTC, BTC/USD traded at $78,019 on Bitstamp, down 0.12% on the day.

    Why Did Bitcoin Correct After Reaching $81,000?

    The catalyst was macroeconomic rather than crypto-specific.

    On Friday, 28 August, new Federal Reserve Chair Kevin Warsh delivered his first Jackson Hole keynote. He highlighted PCE inflation running at 3.7% year over year and 4.1% annualised over the previous six months, signalling that the Fed still has more work to do.

    Markets repriced rapidly. September rate-hike odds on CME FedWatch rose to roughly 56% from 35% a day earlier, reaching 60% intraday. Gold fell 2.4%, US equities surrendered their early gains, and Bitcoin dropped from $81,455 to a low of $76,845 before closing near $77,800.

    Forced liquidations intensified the decline. CoinGlass recorded approximately $486 million in liquidations across about 95,731 traders, including $368 million in long positions. Altcoins performed worse, with Ethereum closing at $2,443, down 2.70%; Solana at $104.13, down 4.65%; and XRP at $1.3833, down 4.80%.

    What Do Bitcoin ETF Flows Say About Institutional Demand?

    US spot Bitcoin ETFs recorded $201.81 million in net outflows on 28 August, ending a nine-day inflow streak that had brought nearly $3 billion into the funds since 17 August.

    ARK 21Shares ARKB accounted for $114.9 million of the outflows, followed by Bitwise BITB at $49.7 million and BlackRock IBIT at $33.4 million. Morgan Stanley’s MSBT was among the few funds to attract new money, recording $9.3 million in inflows.

    The distribution of outflows is significant. IBIT’s relatively small share of the redemptions points to profit-taking after a rapid rally rather than a broad institutional exit. August month-to-date inflows remain above $3.1 billion, making it the strongest month of 2026. The funds collectively hold more than one million bitcoin, and the reversal came one day after their combined net assets crossed $100 billion.

    Ether ETFs moved in the opposite direction, adding $102 million on the same day and recording a tenth consecutive session of inflows.

    ETF creations require fund managers to buy spot Bitcoin, while redemptions require them to sell. If outflows continue this week, the market could lose the buying support that helped hold the $80,000 level.

    What Does the Bitcoin Chart Show?

    Bitcoin bottomed near $62,277 in mid-August before moving almost vertically higher. It cleared the 200-day exponential moving average at $72,170 within days and then ran into resistance at $78,670. The price is now sitting near that level without managing to close above it.

    The difficulty is that $78,670 also capped Bitcoin’s early-May rally. At that time, BTC consolidated just below the level for two weeks, failed to break through and fell to the low $60,000s by June.

    The current setup closely resembles that earlier structure, although there is one important difference. In May, the 200-day EMA was above the market and declining. It is now below the price at $72,170 and has begun to flatten.

    Momentum is also cooling. The daily RSI is 71.03, placing it in overbought territory, and it has already fallen below its own moving average at 74.90.

    The sharp advance also created a volume vacuum between approximately $68,000 and $76,000. Such thinly traded areas can accelerate moves in either direction.

    Bitcoin Price Targets if BTC Breaks Higher

    The next bullish move depends on a daily close above $78,670 supported by strong volume.

    $81,455: This is the first target, based on the 28 August high and the 50-week moving average near $81,000. That moving average has separated bull and bear phases through much of Bitcoin’s history and remains one of the most important levels in the current cycle. A sustained breakout above $82,000 would require genuine spot demand rather than short covering.

    $88,000: This is the next major target and the first clear structural resistance above $81,455.

    $100,000: This remains the stretch case. Standard Chartered’s Geoff Kendrick has indicated that his year-end forecast may now be too low, although reaching $100,000 would likely require the Federal Reserve narrative to turn more dovish after a soft inflation reading before 16 September.

    Bitcoin Downside Price Targets

    A second rejection at $78,670 would leave several clearly defined support levels below.

    $74,450: This is the first support and the most likely destination for a normal pullback. Holding this level would keep the broader uptrend intact.

    $72,170: The 200-day EMA is the key technical line. A loss of this level would suggest that the August advance was a bear-market rally.

    $66,803 to $65,000: This support shelf formed through July and early August. A decline into this zone would erase most of the recent advance but leave the broader structure repairable.

    $62,277: This is the origin of the rally. A complete round trip back to this level would represent a textbook failed breakout.

    $58,000: This is the bear-case target. Glassnode has warned that sellers appear exhausted while buyers remain absent, and that a break below $58,500 could open the way to a deeper decline. Michael Terpin has identified an October bottom near $57,000. That scenario would require a September rate hike to materialise.

    For context, Bitcoin has already fallen approximately 54% from its high in the current cycle, although that decline remains shallower than the drawdowns recorded in 2018 and 2022.

    Which Bitcoin News Could Move BTC Next?

    The CLARITY Act remains stalled in the Senate, while bank lobbying pushed Circle and Coinbase shares lower on 28 August. A proposed SEC crypto custody rule, RIN 3235-AN46, entered White House review on 25 August.

    XRP ETFs advanced through two new US filings, and Grayscale launched the first spot Zcash ETP under the ticker ZCSH on NYSE Arca.

    Market sentiment is another risk. The Crypto Fear and Greed Index reached 72 on 28 August, compared with a 30-day average of 42. When positioning becomes crowded so quickly, relatively small catalysts can trigger outsized selling. Friday’s move demonstrated that risk.

    Bitcoin Price Prediction: What Should Traders Watch?

    Bitcoin is at a decision point rather than in a confirmed trend.

    The bullish scenario requires a daily close above $78,670, a return to net ETF inflows this week and support from the $76,700 to $77,300 area during any retest. If all three conditions are met, Bitcoin could break through $81,000 and open the path toward $88,000.

    The bearish scenario requires a second rejection at the current resistance level followed by a break below $72,170. Given the limited trading volume between current prices and the lower support zones, such a move could reopen $65,000 quickly.

    The base case is range-bound trading. Bitcoin is overbought into resistance, while the underlying structure remains strong but is losing momentum. The Federal Reserve outlook is also uncertain with three weeks remaining before the key September decision.

    A range between $74,450 and $78,670 while the RSI cools would be the healthiest outcome for the bulls, and it is the scenario the chart currently supports. Traders should watch ETF flow data from Monday through Wednesday for the next major signal.

    Source: cryptonews.net

  • Fed Chair Kevin Warsh Triggers $488 Million Crypto Liquidation Cascade as Rate Hike Expectations Rise

    Fed Chair Kevin Warsh Triggers $488 Million Crypto Liquidation Cascade as Rate Hike Expectations Rise

    Bitcoin fell below $77,000 on Friday after Fed Chair Kevin Warsh revived concerns that interest rates could move higher at Jackson Hole.

    Data from CryptoSlate showed Bitcoin, the largest cryptocurrency by market capitalization, dropping as low as $76,909 before recovering to $77,712 at press time. The cryptocurrency remained down about 4% over the previous 24 hours.

    The decline intensified a broader crypto deleveraging event that wiped out nearly $488 million from derivatives traders as markets sharply repriced expectations for Federal Reserve policy.

    Warsh revives rate-hike fears

    Traders raised the probability of a September rate increase to about 60%, up from roughly 35% before Warsh’s remarks. Short-term Treasury yields also climbed, while the US dollar strengthened.

    Warsh gave investors several reasons to reassess expectations that the Federal Reserve was preparing to ease monetary policy. He argued that inflation remained too high despite improved price data during the summer.

    The Fed’s preferred personal consumption expenditures price index was running at 3.7% over the past year and at a 4.1% annualized pace over the past six months. Both readings remain well above the central bank’s 2% target.

    Recent inflation reports had not convinced Warsh that the underlying trend had changed. He said:

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

    Warsh also questioned whether current borrowing conditions were restraining demand sufficiently. Credit markets showed limited signs of policy restraint, while corporate bond spreads remained historically narrow and bank lending standards relatively easy.

    He added:

    “I would be hard pressed to describe broad financial conditions as restrictive.”

    The combination delivered a hawkish signal to financial markets. Warsh described labor conditions as consistent with full employment, pointed to healthy consumer spending and strong business investment, and said the Fed’s “predominant focus right now should be on prices.”

    For crypto traders, the implication was immediate. A resilient economy gives the Fed more room to keep monetary policy tight, while persistent inflation increases the risk that its next move could be another rate increase rather than the easier financial conditions that risk assets had been anticipating.

    The two-year Treasury yield rose to a one-month high after the remarks as investors increased their bets on another rate increase.

    Leveraged crypto traders suffer nearly $488 million in liquidations

    The shift in rate expectations hit a crypto market that had entered Friday with substantial leveraged exposure following Bitcoin’s recent rally above $80,000.

    CoinGlass recorded $487.68 million in liquidations across the cryptocurrency market during the previous 24 hours, affecting 97,691 traders. More than $200 million in positions were closed within one hour of Warsh’s speech.

    Bitcoin and Ethereum led crypto liquidations as 24-hour losses reached $487.81 million across 97,772 traders. Source: CoinGlass

    Long positions accounted for more than $360 million of the losses, indicating that traders positioned for further gains absorbed most of the reversal. Bitcoin positions generated about $141 million of the liquidations.

    The largest individual liquidation was an $11.66 million ETH-USDT position on Binance.

    Warsh’s speech also affected the gold market. Reports said gold and silver lost more than $700 billion in combined market value following the remarks.

    Higher interest-rate expectations create several simultaneous headwinds for cryptocurrency markets. Rising Treasury yields increase the returns available from dollar-denominated assets, while a stronger dollar typically tightens financial conditions for speculative investments.

    Expectations for more restrictive monetary policy can also reduce the liquidity that helped drive Bitcoin’s recent advance.

    Friday’s reaction showed how quickly that relationship can reassert itself. Bitcoin had been trading near $80,000 before Warsh’s speech became the dominant macroeconomic catalyst. Contemporaneous reports showed the cryptocurrency falling more than 3% as rate-hike expectations increased.

    Less Fed guidance could increase crypto rate volatility

    Warsh offered little certainty about the Federal Reserve’s next move.

    The chairman has moved away from the forward guidance used heavily by his predecessors, arguing that telegraphing policy paths can distort markets and limit the central bank’s flexibility when economic conditions change.

    He also rejected the idea of giving investors a mechanical reaction function that would dictate how interest rates should respond to individual economic reports.

    This approach could make upcoming inflation and employment data more important for Bitcoin and other risk assets. Traders will have fewer signals from the Fed about how policymakers intend to respond to new economic information.

    Apollo Global Management Chief Economist Torsten Slok has argued that this type of policy regime could push more interest-rate moves outside Federal Reserve meeting days. Investors would continuously reprice economic data instead of waiting for policymakers to validate existing expectations.

    Slok noted that since the Fed began raising rates in 2022, much of the increase in longer-term Treasury yields has occurred outside Federal Open Market Committee meetings. Inflation reports, employment data, Treasury issuance and the term premium became larger drivers of the bond market.

    Warsh reinforced that philosophy on Friday, saying markets should form their own expectations rather than look primarily to the Fed for their “next trade.”

    For Bitcoin, Friday offered an early example of what that environment could look like.

    Warsh stopped short of committing to a September rate increase, leaving incoming data to determine whether the Fed follows through. However, his insistence that inflation remains too high, financial conditions are not particularly restrictive and interest rates remain the central bank’s main policy tool was enough to revive fears of tighter monetary policy.