Bitcoin Drops Below $77,000 as Fed’s Warsh Signals Inflation Fight Far From Over
Bitcoin fell to $76,845 on August 28, 2026, after Federal Reserve Chair Kevin Warsh delivered a hawkish speech at the Jackson Hole symposium, warning that inflation remains stubbornly above the central bank’s 2% target. The sharp move triggered a wave of forced selling across the crypto market, with total liquidations reaching $478 million in a single day.
Warsh’s comments, which pushed back against market expectations for imminent rate cuts, sent risk assets reeling. Bitcoin, which had been trading in a narrow range above $80,000 in recent weeks, broke through key support levels as traders scrambled to adjust their positions.
Also read: How to Sell Bitcoin Without Getting Stuck: A Practical Cash-Out Guide for 2026
Warsh’s Inflation Warning Rattles Markets
Speaking at the annual central bank gathering in Wyoming, Warsh made clear that the fight against inflation is far from over. He pointed to both PCE and CPI inflation measures, noting that while recent data has shown improvement, it is not enough to signal a lasting trend.
“They do not tell me that underlying trends have meaningfully improved,” Warsh said, according to his prepared remarks. He added that the Fed needs to be confident that inflation is moving sustainably toward its target before considering any policy easing.
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The hawkish tone was a stark contrast to earlier market expectations that the Fed might begin cutting rates as early as September. According to CME Group’s FedWatch tool, traders had priced in a roughly 60% chance of a rate cut at the next meeting just a week ago. Those odds have now fallen sharply.
Leveraged Positions Wiped Out
The sudden price drop had an outsized impact on leveraged traders. Data from Coinglass shows that approximately 95,731 traders were liquidated over the past 24 hours, with total liquidations reaching $485.86 million. Long traders bore the brunt of the damage, accounting for roughly $368 million of the losses.
The largest single liquidation was an $11.66 million ETHUSDT position on Binance, underscoring the broad-based nature of the sell-off. Ethereum, which had been showing relative strength in recent weeks, also saw its price decline sharply in tandem with Bitcoin.
Such liquidation cascades are a familiar pattern in crypto markets, where high employ amplifies price moves. When Bitcoin breaks below a key level, margin calls force traders to sell, which in turn pushes prices lower and triggers further liquidations.
Key Levels to Watch: $81,000 Resistance and $70,000 Support
Despite the sharp decline, some analysts see reason for cautious optimism. Crypto analyst Ash Crypto highlighted the 50-week moving average near $81,000 as the most critical resistance level for Bitcoin.
“Bitcoin is facing the most important resistance of this cycle. The 50-week moving average sits at $81,000, the line that has separated bull markets from bear markets throughout Bitcoin’s history,” Ash Crypto noted in a post on X (formerly Twitter).
According to the analysis, Bitcoin has already fallen around 54% from its cycle high, although this decline is less severe than the crashes seen in 2018 and 2022. Some technical indicators, including MACD, RSI, and Stoch RSI, have turned positive, suggesting that buying momentum could be building.
However, Bitcoin needs to break and hold above $81,000 to confirm a stronger bullish trend. Until then, traders remain cautious. If selling pressure intensifies and Bitcoin fails to recover, the next major support zone could be $75,000–$70,000, a level that has historically attracted significant buying interest.
The broader macro backdrop remains uncertain. With the Fed signaling that rates may stay higher for longer, risk assets like Bitcoin could face continued headwinds. On the other hand, some analysts argue that Bitcoin’s growing adoption by institutional investors and its status as a hedge against currency debasement could provide a floor under prices.
For now, all eyes are on whether Bitcoin can reclaim the $81,000 level. A decisive break above that resistance could signal the start of a new uptrend, while a failure to do so might open the door to further downside. As always in crypto, volatility remains the only certainty.
This article is for informational purposes only and does not constitute financial advice. Cryptocurrency markets are highly volatile and uncertain. Always conduct your own research before making investment decisions.
