(Aug 26): Bitcoin’s rally is running into resistance at the psychologically important US$80,000 (RM321,800) level as traders await key US monetary policy signals to gauge whether the past week’s gains have room to run.
The largest cryptocurrency advanced 1% on Wednesday to about US$79,000 as of 9.20am in London (4.20pm Malaysia). It briefly broke through US$81,000 on Tuesday before giving up gains as some investors moved to lock in profits from the biggest weekly advance in over three years.
Bitcoin remains up about 22% since Treasury Secretary Scott Bessent said on Aug 20 that the US would “at least double” planned purchases of outstanding 10- to 30-year debt. Yet the digital asset’s advance has stalled as investors look out for upcoming monetary policy cues, including today’s release of the latest personal consumption expenditures price index data.
“The pullback came on profit-taking ahead of tonight’s core PCE inflation release” and an anticipated address by US Federal Reserve Chairman Kevin Warsh on Friday at the Jackson Hole Economic Policy Symposium, said Tony Sycamore, an analyst at IG Australia.
Signs of de-escalation in the Middle East have also taken some momentum out of the rally. Sycamore said the sharp fall in oil prices and US yields suggests “further Treasury intervention may not be needed for now”.
This could make it difficult for bitcoin to break above the US$80,000 to US$83,000 zone. Like gold, the digital asset may have “already struck a short-term high”, Sycamore said. A sustained move higher, though, could open the door for bitcoin to reach US$95,000 to US$100,000, he added.
Demand for US exchange-traded funds remains a source of support. US-listed spot bitcoin funds recorded about US$314 million of net inflows on Tuesday, their fifth consecutive session with more than US$300 million, suggesting institutional appetite has held up even as the token retreated from its latest high.
Signals beneath the surface remain mixed.
Relative strength index “readings across several major tokens point to overbought conditions, suggesting near-term consolidation is plausible rather than an uninterrupted run higher,” said Rachael Lucas, an analyst at BTC Markets.
Nicolai Søndergaard, a senior research analyst at Nansen, described bitcoin as in a “late-stage bottoming process". Along with improved ETF flows, selling pressure has eased and large token holders have resumed selective accumulation. However, data still show weak US spot demand, he said.
A combination of sustained ETF flows, stronger spot-led trading volumes and a positive Coinbase premium — when bitcoin trades at a higher price on the US exchange, signalling strong demand in the country — would point toward a more durable advance, Søndergaard said.
A failure to hold US$80,000 after a breakout, especially if funding rates rise or ETF inflows slow, would raise the risk of a pullback before the next leg higher, he said.
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