Bitcoin lost momentum shortly after breaking above the $81,000 mark as markets awaited the first speech from Fed Chair Kevin Warsh at the Jackson Hole forum. The price turned downward shortly after reaching this key resistance level for the second time this week, repeating the correction from August 25th, when the cryptocurrency surpassed the $80,000 level for the first time in over three months.
Market data shows that Bitcoin peaked at $81,455 shortly after 9:30 PM on Thursday, briefly pushing back the bearish pressure that had been building since Tuesday. This was followed by a sharp sell-off that erased the gains recorded on August 27th, with the asset plunging to a session low of $78,442 around 10:15 AM. However, just over an hour after Warsh's speech, Bitcoin fell to a new low of $76,877 before quickly recovering to the $77,000 level and testing the $78,000 mark.
This decline reduced Bitcoin's weekly gain to 2%, lowering its market capitalization from over $1.61 trillion to $1.58 trillion. Despite the drop, Bitcoin remains on track for double-digit monthly growth thanks to a sharp rally between August 19th and 21st.
In the derivatives market, Bitcoin's reversal less than 24 hours after reclaiming the $80,000 level triggered liquidations totaling $107 million across both long and short positions. Coinglass data shows an almost equal split: $50 million in long positions and $57 million in short positions were liquidated. Across the broader cryptocurrency market, approximately $300 million in leveraged positions evaporated.
According to the analytical resource Cryptoreviewing, Bitcoin's early morning surge to $81,500 and its immediate drop below $79,300 led to $465 million in liquidations over 24 hours—significantly exceeding the standard derivatives liquidation volume that might be assumed based solely on exchange data. In a post on X, Cryptoreviewing noted that Bitcoin almost perfectly passed through the liquidity zone on the uptrend between $80,400 and $81,600 but failed to hold above $80,000. This weakened the short-term momentum and shifted the short-term trend back towards caution.
Order Book Imbalances
The post also highlighted that liquidity distribution is currently heavily skewed downwards: approximately $5.7 billion is concentrated in the range from $75,000 to $78,500. This contrasts with around $2.8 billion concentrated above—in the range from $81,500 to $84,000. According to Cryptoreviewing, this imbalance indicates that a deeper pullback still represents a significant risk on longer timeframes.
On lower timeframes, the largest liquidity clusters are concentrated at $78,600 and $79,100 on the downside and $81,300 and $81,900 on the upside. The post concludes that these zones are the most likely candidates for a breakout in the near term.
Regarding order flow, Cryptoreviewing notes that 'whales' are maintaining powerful sell walls in the $80,800 to $83,000 range, while large buy orders remain clustered around $78,000 to $79,000 and below—a sign that institutional buyers continue to buy the dips but face a serious ceiling for further gains. Meanwhile, open interest has recovered, futures traders are increasing their positions, and the Coinbase premium has turned positive. However, spot market demand is weakening, indicating that leverage usage is recovering faster than organic purchases.
In his speech, Warsh reiterated his opposition to a 'forward guidance' strategy—a signaling strategy favored by previous Fed chairs—arguing that despite recent positive data, persistent inflation still threatens economic growth. He emphasized the need to return to traditional central banking: adjusting interest rates as conditions change to ensure price stability without destabilizing the labor market.
Although the war in Iran and a sharp rise in oil prices have clouded US growth prospects, Warsh struck an optimistic tone, pointing to unprecedented corporate spending on artificial intelligence technology and infrastructure as a powerful counterbalance.
