After surging over $15,000 in the past 10 days alone, there is risk of a near-term pullback if Warsh says anything remotely hawkish at – what are the levels to watch from here?
Bitcoin Key Takeaways
- Bitcoin’s most tangible bullish development over the last two weeks has been the return of Bitcoin ETF inflows, to the tune of $2.8B over the last eight days alone.
- If Warsh signals tacit approval of elevated inflation or Treasury Secretary Bessent’s meddling in the Treasury market, Bitcoin’s rally could extend further from here.
- After surging over $15,000 in the past 10 days alone, there is risk of a near-term pullback if Warsh says anything remotely hawkish
After consolidating through the early part of the week, Bitcoin is back on the bounce above $80K ahead of FOMC Chairman Warsh’s highly anticipated keynote speech at the Jackson Hole Economic Symposium tomorrow.
The most tangible bullish development over the last two weeks has been the return of Bitcoin ETF inflows. US-listed ETFs recorded $232 million of net inflows yesterday, extending their positive streak to eight consecutive sessions. Cumulative inflows over that period are in excess of $2.8 billion, with little in the way of a slowdown despite prices at 3-month highs:
Source: Farside Investors
More broadly, the macroeconomic backdrop has become more supportive for scarce assets. and Bitcoin have both benefited from concerns about fiscal deficits, elevated government debt and potential currency debasement in recent weeks, with the US Treasury’s expanded long-term bond buyback program serving as the proximate bullish catalyst. The fact that remain near multi-year highs despite the recent actions shows that investors remain skeptical about the government’s ability to control borrowing costs.
Friday’s speech by Fed Chair Kevin Warsh at Jackson Hole is the next major event risk. While some traders are looking for an explicit hint ahead of the September FOMC meeting, Warsh is more likely to tip his hand about longer-term issues like the central bank’s general tolerance for above-target inflation and the Fed’s relationship with the US Treasury, which appears to be undermining his desire for clear signals from the market. If Warsh signals tacit approval of elevated inflation or Treasury Secretary Bessent’s meddling in the Treasury market, Bitcoin’s rally could extend further from here.
Bitcoin Technical Analysis: Daily Chart
Source: Tradingview, StoneX
Looking to the chart, Bitcoin is on track for its highest close since mid-May. After surging over $15,000 in the past 10 days alone, there is risk of a near-term pullback if Warsh says anything remotely hawkish; the overbought reading in the 14-day RSI underlines this risk.
Nonetheless, traders will be inclined to step in relatively quickly on any dips toward the mid-$70Ks – after all, actions speak louder than words, and Warsh has shown a reticence to back up his aggressive inflation-fighting words with actions so far.