Bitcoin Slips Under $77,000 After Fed's Warsh Signals Rates May Need to Rise Further

Bitcoin dropped below $77,000 after Federal Reserve Chair Kevin Warsh used his Jackson Hole remarks to keep the door open to additional rate increases if inflation stays well above target. The move unwound part of BTC's recent advance toward $80,000 as traders quickly repriced expectations for the September Fed meeting. Rate futures lifted the implied odds of a 25-basis-point hike to 55.7% from 35.4% before Warsh spoke, according to Reuters. While he stopped short of signaling a specific decision, Warsh said the Fed would still have "work to do" unless inflation moves convincingly toward the 2% goal. July PCE inflation was 3.7%, underscoring how little room policymakers have to declare victory over price pressures. ### Higher yields weigh on BTC The most immediate market response showed up in short-dated Treasuries. The 2-year yield rose to about 4.31%, and the U.S. dollar strengthened following the speech. Higher yields increase the return available on relatively low-risk government debt, often pulling demand away from non-yielding, higher-volatility assets such as Bitcoin. That backdrop contrasts with conditions that helped BTC earlier in August, when it climbed toward $79,500 as Treasury bond-buyback measures eased long-term yields and institutional demand improved. Coinpaper's earlier coverage noted weekly spot Bitcoin ETF inflows of roughly $1.9 billion during that rebound. ### ETF inflows continue, but macro turns less supportive Institutional buying remains steady. U.S. spot Bitcoin ETFs added $242.3 million on Aug. 27, extending inflows to nine straight sessions and pushing the run rate to about $3.04 billion, according to the latest ETF flow data. Even so, the macro setup has hardened. Ahead of Warsh's speech, traders were already watching $77,000 as a key near-term level. Analysts have cautioned that a decisive break could sap momentum after Bitcoin repeatedly failed to hold the $81,000–$83,000 resistance zone. The near-term focus is whether BTC can reclaim $77,000 quickly. A prolonged failure would leave the recent breakout exposed, while a rebound would suggest ETF demand is still strong enough to absorb a more hawkish Fed backdrop.