Bitcoin slipped back below $79,000 in Asian morning trading Thursday after briefly climbing above $80,000 for the first time since May, as traders reassessed the cryptocurrency’s sharp recovery and began pricing in a less supportive interest-rate outlook.
Bitcoin fell nearly 1% to just under $79,000, cooling after a rally that pushed the token from below $68,000 last week. Despite the pullback, Bitcoin remains about 14% higher over the past seven days, although that gain has narrowed considerably from 23% a day earlier as the rolling weekly window moves beyond last week’s surge.
The shift in monetary policy expectations is emerging as a new test for the rally. Shorter-dated U.S. Treasuries weakened overnight as traders increased bets that the Federal Reserve could raise interest rates, challenging the lower-yield environment that had helped support Bitcoin’s advance.
Attention is now turning to Federal Reserve Chair Kevin Warsh, who is scheduled to deliver his first Jackson Hole keynote as chair on Friday. The speech comes roughly three weeks before the Fed’s September 15-16 policy meeting, making it a potentially important signal for markets already adjusting their expectations.
XRP Leads Losses as Crypto Market Cools
XRP suffered the sharpest decline among major cryptocurrencies, falling almost 3% to just above $1.41. The drop comes despite a roughly 28% weekly gain, which remains the strongest performance among the major tokens.
XRP’s retreat follows an aggressive recovery that pushed the token toward $1.70 before momentum began to cool. The move below recent highs suggests traders are taking some profits after the rapid advance, with the $1.50-$1.55 area remaining an important level in the near-term price structure.
Other major cryptocurrencies were mixed. Hyperliquid’s HYPE fell more than 1% to just under $81, while Tron declined less than 1% to just above $0.33.
Solana moved against the broader trend, gaining almost 4% to above $101. Ether added about 1% to just under $2,494, while BNB rose almost 1% to just below $703. Dogecoin was little changed at just under $0.09.
The broader cooling is also visible in weekly performance. Ether’s seven-day gain has dropped to roughly 11%, down from 29% a day earlier. The sharp compression in weekly returns reflects how quickly the market has moved beyond the strongest phase of last week’s rally.
XRP Price Performance on Aug. 27, 2026 (Source: CoinMarketCap)
Bitcoin Faces a Key Technical Test
The pullback does not necessarily mean Bitcoin’s recovery is over. Joel Kruger, markets strategist at LMAX Group, said daily technical indicators have moved into overbought territory but cautioned that severely overbought conditions do not automatically result in a major reversal.
Kruger identified the May high near $82,820 as the next important confirmation level. A decisive break above that resistance could strengthen the bullish case and potentially put the $100,000 level back into focus.
For now, however, Bitcoin must contend with a less favorable macro backdrop. Higher expectations for interest rates can reduce the appeal of riskier assets by making traditional fixed-income investments relatively more attractive.
The market is also watching the quality of the latest Bitcoin advance. Singapore-based QCP Capital said in a Telegram broadcast that falling open interest indicates the rally may have been driven largely by short covering rather than a fresh wave of leveraged buying.
Spot Bitcoin ETF inflows, meanwhile, have represented more genuine demand, according to the firm. That distinction could become increasingly important if the broader liquidity environment becomes less supportive.
QCP Capital questioned whether the current move represents the beginning of a more structural rally or one that is still dependent on temporary positioning and liquidity conditions.
Bitcoin Tests Major Resistance After Strong Rebound (Source: TEKT0NIC)
Markets Await the Fed
The crypto market’s next major catalyst may therefore come from Washington rather than the blockchain sector. Warsh’s Jackson Hole address could offer clues about how the Fed views inflation, growth and the path of interest rates ahead of the September meeting.
Traditional markets remained relatively constructive despite the crypto pullback. Nvidia gained almost 5% in extended trading after signaling strong sales growth through 2028, while Marvell Technology and Sandisk also advanced. MSCI’s Asia Pacific index rose about 0.5%, led by SK Hynix and Samsung Electronics, while South Korea’s Kospi gained nearly 2%.
Bitcoin’s ability to hold above recent breakout levels will now be closely watched. A return above $80,000 would put the recent highs back in focus, while the May high near $82,820 represents a more significant test.
For now, the move below $79,000 looks less like a collapse than a pause in a powerful recovery. But with rate expectations turning less favorable and signs that positioning, rather than fresh buying, has helped drive the rally, Bitcoin faces a tougher test of whether its latest advance can sustain itself.
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Source: https://nftplazas.com/bitcoin-below-79000-xrp-losses-fed-rate-hike-bets/
