On 28 August, Fed Chair Kevin Warsh offered a more hawkish assessment of inflation at the Jackson Hole symposium than he had given after the July meeting. The annual Jackson Hole gathering is closely watched by markets because it has historically served as a venue for signalling shifts in Federal Reserve policy thinking. Warsh reaffirmed the Federal Reserve's 2% target for core PCE inflation and called tackling price pressures the central priority for policymakers.

His remarks noticeably raised expectations for a rate hike at the September meeting, with the market apparently pricing in a higher probability of such a scenario. Shifts in rate expectations matter for Bitcoin because tighter monetary policy tends to strengthen the dollar and raise yields, conditions that have often weighed on risk assets, including cryptocurrencies. Against this backdrop, Bitcoin pulled back and gave up part of its August gains.

Technical Analysis of Bitcoin

The four-hour BTC/USD chart shows a pronounced uptrend: the move from 14 to 28 August took the price from around $63,000 to a peak near the current red resistance at $81,500.

An ascending wedge formed near the top of this advance, and on 28 August the price broke below its lower boundary on elevated volume. Ascending wedges are generally regarded as bearish reversal patterns, since they reflect slowing upside momentum even as prices push higher; a breakout on heavy volume is typically watched as potential confirmation. In this case, however, the decline has yet to develop into a sustained move. Momentum has slowed, and Bitcoin is currently trading within the density of the market profile, between the Point of Control (POC) at $78,900 and the lower profile boundary at $78,100.

If the decline resumes and the price establishes itself below the lower profile boundary, the round-number level at $77,000 could provide the next area of support. Round numbers such as $77,000 often attract attention as psychological reference points where orders tend to cluster.

Conversely, if sellers fail to push the price lower and the wedge breakout proves false, Bitcoin would first need to overcome the market-profile density on the way up. A break above the upper profile boundary at $80,000 would reopen the path towards the trend high around $81,500.

The RSI + MAs indicator currently shows readings of 50, 48 and 55, with all three measures remaining within the neutral zone.

Key Takeaways

The wedge breakout has yet to confirm a sustained decline, and the market remains within the current profile range. Neutral RSI + MAs readings offer no clear advantage to either buyers or sellers.

A more decisive move in Bitcoin could emerge as market expectations surrounding the Federal Reserve's September decision continue to evolve.