Bitcoin traded around $77,800 on Monday, up 22% over the past seven days after climbing from a weekly low of $63,387, according to CoinGecko data. With the rally stalling just below a widely watched threshold, analysts have flagged $80,000 as the key resistance level ahead—and this week's Jackson Hole meeting as the market's next test. Several argue that Bitcoin is now in a "late stage of the bear market."

This year's symposium—the Federal Reserve Bank of Kansas City's annual gathering of central bankers, economists, and financial officials in Jackson Hole, Wyoming, where the Fed chair's keynote has historically served as a platform for signaling shifts in policy thinking—runs from Thursday to Saturday under the theme "Financial Innovation: Implications for Payments and Policy," though what markets care about is Friday morning, when Kevin Warsh delivers his first keynote as Fed chair. Warsh, who previously served on the Fed's Board of Governors from 2006 to 2011, took office in May, succeeding Jerome Powell, and has made changing how the Fed communicates a priority, dedicating one of five internal task forces to the question. Friday will be the market's first read of how he handles the format, ahead of the Fed's September 16 rate decision.

Asked about the speech after July's Fed meeting—at which the committee held rates at 3.50% to 3.75% on a 9-3 vote, with three regional presidents dissenting in favor of a hike—Warsh said his keynote was "a blank piece of paper right now."

Rate expectations have shifted sharply in recent weeks. CME's FedWatch tool, which tracks pricing in federal funds futures, puts the chance of a hike at 38.4%, against 61.6% for no change, with nothing priced for a cut. A month ago those figures were close to inverted, with a hike at 82%. Traders on prediction market Myriad, owned by Decrypt's parent company Dastan, are marginally more dovish, pricing a 25 basis point increase at 32% against 71% for no change.

The rally that carried Bitcoin to its current level had several catalysts at once. U.S. Treasury Secretary Scott Bessent announced a doubling of long-dated bond buybacks, dragging yields lower and weakening the dollar; President Donald Trump met with crypto executives and pressed Congress on the Clarity Act, a bill that would create a regulatory framework for digital assets in the U.S. and divide oversight between the SEC and the CFTC; and spot Bitcoin ETFs, the U.S. funds approved in January 2024, saw heavy buying return.

Exchange balances had fallen to multi-year lows, with more than 80% of supply held by long-term holders, said Stephen Wundke, strategy and revenue director at Algoz. As spot buying pushed through $65,000 and then $70,000, short positions were closed out at scale, and the engines doing it fed automated market buys into a book already short of coins. Bitget Wallet's Lacie Zhang put the total at more than $4 billion of crypto shorts over two to three days, with Bitcoin shorts alone around $2.75 billion during the initial squeeze.

Analysts' differing outlooks

James Butterfill, head of research at CoinShares, called it "a macro story, not a crypto one," writing that softer inflation and weaker payrolls have undermined the case for tightening.

"Short dated yields have fallen, a clear signal that bond investors no longer expect further Federal Reserve rate hikes," Butterfill wrote, adding that the "combination of easing monetary expectations alongside growing doubts over sovereign debt sustainability has historically been a constructive environment for Bitcoin."

He expects the market to hold its range, with $80,000 "an important upper boundary." Whales had stopped selling and begun to accumulate again, he wrote, though not yet at a scale that would imply "an immediate and sustained breakout"—which he did not expect them to reach over the next 12 months.

Tim Sun, senior researcher at HashKey, told Decrypt that what matters is the change in what is driving the price rather than the level itself. A thoroughly deleveraged market, a weaker dollar, concentrated short liquidations, and returning ETF flows together suggest the market "seems to be forming a consensus around the bottom range," he said.

Like Butterfill, Sun also put "clear resistance" near $80,000, adding that clearing it would need "new incremental capital and more definitive macroeconomic catalysts." He said the cycle's bear market bottom had "essentially taken shape," with any further fall more likely "a secondary confirmation of the bottom area" than a break below the previous low. He stopped short of calling a bull market, describing this instead as "a trend re-selection phase in the late stage of the bear market."

Wundke told Decrypt that the week's movement represented "a textbook demonstration of supply illiquidity meeting a sudden demand shock." Spot ETFs compounded the squeeze, he said, because unlike futures they require firms to buy and lock up actual Bitcoin, "directly depleting the already scarce exchange reserves." Treasury yield relief, ETF buying, and regulatory signals were "the spark," he said, while the cascading liquidations "provided the explosive fuel."

With many holders back in profit at current levels, Wundke said the bear market may be over. "The next major obstacle is $82,000," he said, adding that clearing it this week could open a path toward $95,000, and that Bitcoin now "looks like any sell offs in price will be treated as buying opportunities from here on."

Bernard Fisher, chief marketing officer at payments firm Oobit, landed in between them. There is "more to this than just another random pump," he told Decrypt, pointing to ETF inflows, a weaker dollar, and the squeeze alongside Trump's comments. He is not, however, ready to call the bear market over.

"The big question now is whether Bitcoin can hold these levels once the hype settles down," he said. "For now, I am cautiously bullish, but I would not rule out a bull trap just yet."