Bitcoin recently wrapped up a rally from below $65,000 in mid-August to break past $80,000, before pulling back following the Jackson Hole speech. This correction coincided with market calculations pricing in a 57% probability of a Fed interest rate hike in September.
According to CME data, the implied probability climbed from 39.9% on August 21 to 57% following Warsh’s speech. Over the same period, 2-year government bond yields moved up to around 4.31%. Macroeconomic figures also offered little room for easing, with headline PCE inflation holding at 3.7% and core PCE at 3.3%. Combined with private domestic demand growing at an annualized 4.2% in the second quarter, inflation remains a primary obstacle to looser monetary policy.
Supply Shifts to Institutional Hands
Amid pressing interest rate prospects, Bitcoin ETFs recorded net inflows of $924.5 million over the past week. This brought total capital inflows to $2.8 billion over the last two weeks. Ether ETFs followed suit, attracting $815.7 million last week across 10 consecutive positive trading sessions. These capital flows account for nearly 12.3% of cumulative total inflows into Ether ETFs since launch, all of which entered throughout August.
On-chain, large holders with balances between 1,000 and 10,000 BTC have trimmed their holdings by 50,500 BTC since late June. On the other hand, institutional custodial services absorbed this supply, logging a 59,100 BTC increase in holdings.
A Real Test in the $80,000 Range
A recent Bitfinex report concluded that the market currently relies more on spot demand rather than excessive leverage. This market structure positions Bitcoin better to absorb selling pressure. Bitcoin’s open interest currently stands at $55.6 billion, marking a 20% increase from early August. Bitfinex noted that this rise in open interest occurred gradually, keeping its baseline low, and identified the $77,100 mark as a critical short-term support level.
CoinEx’s Jeff Ko noted that upward momentum from short squeezes has largely been exhausted. Based on his calculations, the $80,000 to $83,000 price range will be a real test of investors’ capital allocation strength in the market.
As a condition for a continued rally, Jeff Mei from the BTSE exchange stressed that ETF demand must be strong across all products, rather than relying solely on BlackRock’s IBIT, while awaiting improved macro inflation data. For both institutional and retail investors, next month’s inflation report will be just as decisive as the order book bids on exchange screens. Via crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
