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Bitcoin Loses Momentum as Rate Hike Bets Climb

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BTC consolidates below $82K after an overbought RSI signaled rising pullback risk.

After the massive mid-August breakout, Bitcoin bulls packed their bags, the price started to drift lower, and now a new question emerges: Was that all? Probably not, but the next direction will likely be decided by macroeconomic catalysts.

Fed Chair Kevin Warsh sent the odds of a rate hike higher with his Jackson Hole speech, where he revealed that he still considers inflation too hot. Before the speech, the odds were around 40%, and after the speech the probability jumped to 57%. At the time of writing, not much has changed – the odds of a 25-bps hike are now 60%, according to the CME FedWatch tool.

Before the interest rate is announced (September 16), the Fed will receive inflation data (the CPI is coming out next week) and jobs data (the NFP is due later today). This means that the rate odds can still change, especially if today’s NFP reading is well below expectations.

At the moment, the prospect of a rate hike is weighing down Bitcoin and the broader crypto market, but it’s not the only thing. The Clarity Act is stalling, but at least a vote date has been set for September 15. If the Act does not pass before the midterm elections, then the chances of it being signed into law in 2026 will become significantly lower. The midterm elections are scheduled for November 3rd.

The main contention points remain ethics provisions and stablecoin rewards. Although some progress has been made, those who oppose the bill in its current form still consider it’s not enough because politicians could still profit from crypto.

Chart Analysis – BTC/USD

The calm after the mid-August breakout could be attributed to profit-taking, which is not necessarily a sign of weakness. After all, traders who bought in the $63K – $65K area were sitting on a nice chunk of profit when BTC reached $80K, so it was normal for them to want to cash out and wait for a pullback to enter again.

Bitcoin also entered overbought, as signaled by the RSI, which reached as high as 85 (an asset is considered overbought when the RSI reaches 70). This, combined with the strong resistance at $82K, created the perfect setup for a pullback.

The main level to watch is still $82K, which was May’s high and also a key level that could trigger a more serious rally. To the downside, the nearest support is located around $76K.

Bitcoin technical analysis chart showing BTC pulling back from the key $82,000 resistance level after an overbought RSI reading, with $76,000 marked as the nearest support.

Bitcoin retreats after facing strong resistance at $82,000, while the $76,000 area emerges as the key support level during the post-breakout pullback.