The new Fed chair just pulled the rug, but the rally isn't dead. It's just moving from pure momentum to a macro-driven grind.
What happened at Jackson Hole
Kevin Warsh gave a firmly hawkish speech on August 28, his first as Fed chair. He zeroed in on inflation at 3.7% PCE, called the Fed's 2% target "firm and fixed," and said if inflation doesn't move toward it, "we have work to do" . He also pushed back against forward guidance, saying it has "overstayed its welcome" .
The market reaction
Bitcoin slipped from about $80K to a low near $77.8K-$78.6K before stabilizing around $79K . Over $488 million in long positions got liquidated . The implied probability of a September rate hike jumped from roughly 35% to over 50% .
Why this matters for the rally
The $80K rally was driven more by Treasury liquidity injections and short squeezes than Fed policy. Warsh's speech didn't kill it, but it capped the momentum. He made it clear that easier policy isn't coming soon, even if inflation cools. That's a headwind for risk assets like BTC.
The silver lining
Warsh has publicly acknowledged Bitcoin as an "important asset" and a check on monetary policy . His stance is hawkish but not hostile. The rally pulled back, not collapsed. BTC is still up strongly on the week.
What happened at Jackson Hole
Kevin Warsh gave a firmly hawkish speech on August 28, his first as Fed chair. He zeroed in on inflation at 3.7% PCE, called the Fed's 2% target "firm and fixed," and said if inflation doesn't move toward it, "we have work to do" . He also pushed back against forward guidance, saying it has "overstayed its welcome" .
The market reaction
Bitcoin slipped from about $80K to a low near $77.8K-$78.6K before stabilizing around $79K . Over $488 million in long positions got liquidated . The implied probability of a September rate hike jumped from roughly 35% to over 50% .
Why this matters for the rally
The $80K rally was driven more by Treasury liquidity injections and short squeezes than Fed policy. Warsh's speech didn't kill it, but it capped the momentum. He made it clear that easier policy isn't coming soon, even if inflation cools. That's a headwind for risk assets like BTC.
The silver lining
Warsh has publicly acknowledged Bitcoin as an "important asset" and a check on monetary policy . His stance is hawkish but not hostile. The rally pulled back, not collapsed. BTC is still up strongly on the week.