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BTC Bitcoin fell to US$78.4K, Wash suppresses inflation optimism
After Federal Reserve Chairman Kevin Wash downplayed weak summer inflation data, arguing that these data were not enough to prove a continued cooling in inflation, Bitcoin fluctuated violently on Bitstamp, falling to US$78,442. Despite the retreat in prices, 24-hour trading volumes remained stable and market sentiment remained biased towards greed.
This trend stems from Walsh's speech at the Jackson Hole Conference on August 28, 2026. According to the speech text, he reiterated that the Federal Reserve's 2% PCE inflation target will remain unchanged and policies should continue to focus on prices. This statement is a clear hawkish signal to traders who expect easing policy. BTC/USD once fell to US$78,442 in fluctuations after the speech. As of August 30, Bitcoin has recovered to approximately US$78,102, an increase of approximately 0.4% within the day.
Open market data shows that Bitcoin prices are close to the post-speech sell-off level mentioned in the report. The market interprets it as: weak inflation has not translated into positive assets. Traders have been preparing for the speech all week, with the crypto market closely monitoring the potential impact of Walsh Jackson Hole's speech and assessing risks in advance.
Why weak inflation data failed to ease interest rate concerns
Summer data was indeed weak: July's CPI rose 0.1% month-on-month and 3.4% year-on-year, down from June's 3.5%; the Fed's preferred core PCE rose 3.3% year-on-year, and the overall PCE was 3.7%. Walsh countered that the data did not show a substantial improvement in underlying inflation trends, pointing to a six-month PCE rate of change of approximately 4.1%. In short, a month or two of cooling is not enough to prove that inflation can continue to return to target.
The market interprets this as reducing the possibility of recent easing. Interest rate futures showed that the probability of a rate hike in September after the speech rose from about 40% to about 60%. When expectations for interest rate cuts weaken, the relative attractiveness of non-yielding assets such as Bitcoin declines, which explains the decline in prices.
The bearish logic is straightforward: the Fed is concerned about the breadth of inflation, and the September 15-16 FOMC meeting is imminent, and there is a lack of dovish support for risky assets. This trend is similar to the pressure when the spot Bitcoin ETF ended nine days of continuous inflows and Bitcoin fell below $78,000.
Impact of decline on short-term market sentiment in Bitcoin
This is an emotional response to policy comments, not a deal or company-level shock. Bitcoin's 24-hour trading volume is approximately US$14.93 billion, indicating that price revaluation is accompanied by a large number of transactions rather than fluctuations under thin liquidity. High trading activity provides the context for the macro-driven volatility described in the article.
Despite the correction, overall positions are still optimistic. Bitcoin has a market value of approximately US$1.57 trillion, and the Fear and Greed Index is 69, which is in the "greedy" range, indicating that traders have not turned defensive due to the decline.
Not all comments were cautious. Investment manager Louis Navilier directly confirmed the Federal Reserve Chairman's remarks. "I thought Federal Reserve Chairman Kevin Walsh gave an excellent speech in Jackson Hole this week."-- Luis Navilier
In terms of bearish, some institutions believe that there is limited upside in the short term. According to an unconfirmed summary of a QCP Capital report, maintaining Bitcoin above approximately $83,300 requires controlling financing rates and gradually rebuilding open interest positions. The practical conclusion is that short-term sentiment is still tied to macro signals rather than to the unique catalyst of encryption.
As September's FOMC decision becomes the next scheduled test, traders are reassessing the extent to which the data supports easing policy, and Bitcoin's movement during this period is expected to follow the interest rate narrative as closely as it tracks its own order book.
Disclaimer : This article is for information purposes only and does not constitute financial or investment advice. There are significant risks in the cryptocurrency and digital asset markets. Please study for yourself before making a decision.
