Bitcoin drops to $77,000 level following Fed's hawkish messages

Drawing a strong upward chart last week, Bitcoin rapidly retreated from $81,000 to fall to the $77,494 level following Federal Reserve Chair Kevin Warsh's statements at the Jackson Hole symposium.

Trend Reverses in the Market

Bitcoin lost momentum following its strong 22.2 percent surge last week and began to decline as it failed to maintain its intraday gains.

This drop in the cryptocurrency was accompanied by much steeper losses in the altcoin market.

Jackson Hole Symposium

In his speech at the Jackson Hole Economic Policy Symposium, Fed Chair Kevin Warsh stated that no meaningful improvement has been seen in the underlying trends of inflation in the US.

While emphasizing that the Fed must focus on price stability, Warsh expressed that the labor market is displaying an outlook consistent with full employment.

Rate Hike Expectations

Following these statements, which were assessed as hawkish by the markets, expectations strengthened that the Fed could make a 25 basis point rate hike at its September meeting.

According to CME FedWatch data, the probability of a rate hike, which stood at 35 percent a day earlier, climbed above 59 percent following the speech.

Selling Pressure and Prices

With this sudden shift in rate expectations, the US dollar gained strength, creating intense selling pressure on Bitcoin and other cryptocurrencies.

Having climbed as high as $81,330 during the day, Bitcoin lost 3.4 percent in value to drop to the $77,494 level.