The cryptocurrency market has once again come under pressure from macroeconomic factors. Following a speech by U.S. Federal Reserve Chairman Kevin Warsh, the leading cryptocurrency made a sharp reversal from its local high of $81,455, plunging to $76,877. At the time of writing, the asset is consolidating around $77,700, demonstrating high volatility.
Fed Rhetoric: A Hawkish Signal for Risky Assets
In his speech, Warsh reaffirmed the regulator's commitment to the 2% inflation target but made it clear that current data does not indicate significant progress. The annual growth of the Personal Consumption Expenditures (PCE) price index stands at 3.7%, and on an annualized basis over the past six months, it is 4.1%. This is clearly above the target levels.
The Central Bank head emphasized that if inflationary pressure does not begin to ease at a confident pace, the regulator will have to continue tightening policy. Notably, Warsh abandoned the traditional practice of providing clear rate forecasts, calling it "outdated." According to his logic, excessive guidance creates a vicious cycle where markets await cues from the Fed, while the regulator itself begins to react to market prices.
Market Repricing: Probability of a Rate Hike Rises
The traders' reaction was swift. The probability of a rate hike at the September meeting, scheduled for September 15-16, jumped from 35.4% to 57%. This is a significant shift in expectations, which immediately impacted quotes.
Ethereum corrected by 2.1%, dropping to $2,400. Nearly all altcoins in the top 10 by market capitalization moved into the "red zone." Over the past 24 hours, liquidations on the crypto market exceeded $384 million, with $310 million attributed to long positions — a classic scenario of cascading margin calls.
ETF Demand Persists, but the Market Awaits Signals
Despite the correction, institutional demand has not disappeared. U.S. spot Bitcoin ETFs have attracted $2.8 billion over eight consecutive trading sessions, of which $2.02 billion went to BlackRock's IBIT fund. The growth coincided with the U.S. Treasury's decision to increase the volume of long-term Treasury buyback operations by at least double — from $2 billion to $4 billion per operation. This supported debt market liquidity and weakened the dollar, which traditionally favors risky assets.
In August, Bitcoin rose from roughly $62,000 to $80,000, but the market is now at a bifurcation point. As QCP Capital rightly notes, the key factor is not just the fact of breaking the $83,300 level, but the structure of that move. A gradual increase in open interest with moderate funding rates looks like a much healthier signal than a synchronized spike in both price and leverage.
My analysis: The market has become a hostage to macroeconomic uncertainty. Warsh's hawkish stance is not just rhetoric but a clear signal that the Fed is ready to endure economic pain to fight inflation. For Bitcoin, this means the path upward will be thorny in the short term. However, sustained institutional demand via ETFs indicates that long-term investors view current dips as an entry opportunity, not a signal to exit. Watch the market structure — it will determine whether Bitcoin can hold the psychologically important level of $75,000.