The cryptocurrency market faced a sharp sell-off on Friday after Federal Reserve Chair Kevin Warsh used his first Jackson Hole speech to deliver a firmly hawkish assessment of U.S. inflation, prompting traders to reprice the odds of another interest rate hike as soon as September.
Bitcoin slipped below $78,000, falling from near $80,000 to roughly $77,800. The move accelerated quickly, with Bitcoin erasing nearly $3,000 in about an hour. XRP also came under renewed pressure, dropping to around $1.38 after trading as high as $1.47 earlier in the session; it was down about 5% over 24 hours, according to CoinGecko data. Despite the decline, XRP remained roughly 39% higher over the past month.
Warsh said the Federal Reserve remains committed to its 2% inflation target and argued that price pressures are still too broad-based. He noted that 54% of PCE inflation components had risen by more than 3% over the past 12 months, while PCE inflation overall was 3.7% over the past year and 4.1% annualized over the last six months. “None of these measures are perfect, but they all tell a similar story: inflation is running above our 2 percent target,” Warsh said, according to CNBC.
He also stressed that short-term interest rates remain the central bank’s primary tool for achieving its dual mandate. If inflation does not improve, the Federal Reserve could consider raising rates at its September meeting. Traders responded by lifting the probability of a September rate hike to 55.7%, which supported the dollar and pressured risk assets including cryptocurrencies.
The macro-driven decline was amplified by leveraged liquidations. Crypto Rover reported that about $130 billion was wiped from the crypto market and more than $200 million in long positions were liquidated. Bitcoin-specific liquidations reached $97.9 million over 24 hours, with long liquidations jumping nearly 129%. According to one market commentary, bullish traders were squeezed after the previous week had punished short sellers.
On the technical side, Bitcoin was testing a support zone between roughly $76,900 and $77,700, below the 50% Fibonacci retracement level near $79,128 and close to a pivot around $77,731. If $76,909 fails, traders said the next area of interest could be the $74,000 region. The 24-hour RSI dropped to 27.34, entering oversold territory, which may open the door to a short-term bounce, though analysts noted a real recovery would require reclaiming $79,800 and then breaking resistance at $82,000–$83,000.
Not everyone was bearish. Metaplanet CEO Simon Gerovich said at Bitcoin Asia 2026 that he believes Bitcoin has likely found its bottom, with new buyers “not going anywhere,” and that he expects a much stronger finish to the year. Spot Bitcoin ETF demand remains a key long-term driver, even as traders focus on inflation data, Fed policy, and the $76,900 support level.
