Bitcoin Pullback After Fed’s Hawkish Stance; Traders Remain Bullish on $84,000 Target

Bitcoin experienced a significant pullback on Friday, dropping to $76,877 following Federal Reserve Chair Kevin Warsh’s Jackson Hole speech, though prediction market traders are maintaining a decidedly bullish stance on the cryptocurrency’s longer-term trajectory.

Warsh’s keynote, marking his 100th day in the position, signaled that the Federal Reserve maintains ongoing work to control inflation. The Fed chair’s comments about needing to see price pressures move toward target “clearly and at sufficient speed” proved hawkish enough to shift market expectations dramatically. According to the CME Group’s FedWatch tool, September rate-hike probability surged to 55.7% from 35.4% the previous day.

The market reaction was swift and substantial. Cryptocurrency liquidations across major platforms reached approximately $481 million in the 24-hour period surrounding Warsh’s remarks, with more than $360 million stemming from long positions that were caught off-guard by the decline. Bitcoin finished the day at $77,557, representing a 3.39% loss after bouncing from an overnight high near $81,455.

Technical Positioning Suggests Digestion Rather Than Reversal

From a technical perspective, the pullback appears more like profit-taking than a fundamental shift in trend. Bitcoin’s Relative Strength Index currently sits at 69.7, well below the overbought threshold above 80 that preceded Tuesday’s rejection attempt. The Average Directional Index at approximately 39.5 continues to indicate a strong underlying trend rather than one that’s breaking down.

The broader price structure remains constructive for bulls. Bitcoin is still within the significant bullish move that commenced from June’s low around $68,858 and peaked near $81,455 this week. Should selling pressure intensify, traders are monitoring the $73,670 to $75,157 support band as a critical zone. For bulls to reclaim momentum, Bitcoin needs to clear the $81,000 to $82,500 shelf, which would open the path to new highs.

Prediction Markets Signal Long-Term Confidence

Perhaps most tellingly, Myriad’s prediction market on Bitcoin’s next major move has remained remarkably unmoved by Friday’s pullback. The market, which has been active since late February with over $231,000 in trading volume, currently prices the probability of Bitcoin reaching $84,000 at 77%, while assigning just 23% odds to a drop to $55,000.

This dominant bullish skew is significant. The two outcomes traded leadership repeatedly throughout the spring and early summer as volatility whipsawed prices across the year. That back-and-forth has now decisively resolved in favor of the bulls, with the $84,000 outcome gaining 31.7 percentage points. Such strong conviction among prediction market participants—levels not seen since April—suggests traders view this week’s pullback as noise rather than a fundamental reversal.

While the Fed’s tighter stance may create near-term volatility, the broader cryptocurrency market positioning suggests sustained confidence in Bitcoin’s ability to navigate traditional finance headwinds, an encouraging signal for digital asset resilience.

Source: Federal Reserve, via Decrypt. Not financial advice.