Bitcoin fell below the $78,000 mark on August 29, 2026, as the wider crypto market faced a sharp correction. The move came after Federal Reserve Chair Kevin Warsh gave a firm message on inflation at the Jackson Hole meeting. His comments led traders to expect a greater chance of a US rate hike in September.
Bitcoin traded at about $77,384, down 2.5% over 24 hours at the time of the Economic Times report. Ethereum also fell, with its price near $2,430, a drop of 1.9% over the same period. The decline was not limited to the two largest coins. BNB, XRP, Solana, Hyperliquid, Dogecoin and Cardano also lost value, with some major altcoins down as much as 4.2%.
The total crypto market value also moved lower. According to CoinGecko data cited by Economic Times, global crypto market capitalisation fell 2.57% to $3.07 trillion. The fall shows how quickly a change in US monetary policy expectations can affect digital assets.
Warsh puts inflation at the centre
The main reason behind today’s market weakness is the tone from Kevin Warsh. At the Jackson Hole symposium, the Fed chair placed strong focus on inflation and said the central bank still has work to do if price growth does not move toward its 2% target.
Warsh did not directly promise a rate hike. However, his comments made traders more alert to the possibility of tighter policy at the Federal Reserve’s next meeting. Market expectations for a September rate hike rose sharply after his speech. One report put the chance at 55.7%, up from 35.4% on Thursday.
That change matters for Bitcoin because digital assets often react strongly to shifts in interest rate expectations. When rates rise, traditional assets such as government bonds can offer better returns with less risk. That can reduce demand for assets such as Bitcoin.
Why higher rates hurt Bitcoin
Bitcoin does not pay interest to holders. Its price depends on demand from buyers who expect its value to rise or who want it as a store of value. When US interest rates stay high, investors may prefer assets that offer a clearer return.
Higher rates can also reduce the amount of money that moves into riskier markets. Crypto is often treated as a high-risk asset, so it can face strong selling pressure when traders expect tighter financial conditions.
That is what the market saw after Warsh’s speech. Bitcoin fell from levels near $80,000 and moved below $78,000. It briefly went below $77,000, before a partial recovery. CoinMarketCap data showed Bitcoin near $78,000 after the initial fall, with a decline of about 3.4% over 24 hours.
The move also shows that the crypto market remains very sensitive to US economic policy. Even without a confirmed rate hike, the prospect of one was enough to change market sentiment.
Bitcoin had a strong August before the fall
The current decline comes after a much stronger period for Bitcoin. One August 29 report said Bitcoin had gained about 26% during August before the latest drop. The coin had also moved above $81,000 earlier in the week.
That rise had helped create a more positive mood across crypto. Bitcoin had also moved in a way that was closer to gold than to technology stocks during much of the month. That trend led some market participants to view Bitcoin as a form of protection against currency weakness and other economic risks.
Warsh’s comments put that view under pressure. A more hawkish Federal Reserve can support the US dollar and make the idea of a weaker dollar less attractive as a reason to buy Bitcoin.
Still, one sharp fall does not prove that Bitcoin’s wider trend has changed. The next few market sessions will matter more. Traders will watch whether buyers return near the current price area or whether Bitcoin moves to lower levels.
ETF flows add to the concern
Another important part of today’s story is the change in Bitcoin exchange-traded fund flows. US spot Bitcoin ETFs recorded about $201.9 million in net outflows on August 28, according to data cited by crypto.news. That result ended a nine-session streak of inflows.
The reversal is important because spot Bitcoin ETFs have become a major source of demand for the asset. A long run of positive flows can support prices because it shows that investors continue to put fresh capital into Bitcoin products.
The latest outflow does not mean institutional demand has disappeared. It does show that demand can change quickly when market conditions shift.
Another report put the Bitcoin ETF outflow at $201.8 million and said total assets in the US spot Bitcoin ETF group fell to $97.6 billion, after the group had crossed $100 billion the previous day.
The same data also showed a different picture for some other crypto ETF groups. Ether ETFs had a $102.2 million net inflow, while XRP ETFs had a $26.2 million net inflow on the same day. This suggests that the market response is not the same across every major digital asset.
Leverage makes the fall sharper
The price move is also linked to leverage. Many crypto traders use borrowed funds to take larger positions. This can help prices rise fast when the market moves in their favour. It can also make a fall much more severe.
When prices drop past certain levels, leveraged positions can face forced liquidation. That creates more selling, which can push prices down again. Analysts cited by Economic Times said elevated leverage and liquidations added to the pressure on Bitcoin and other crypto assets.
This can create a chain reaction. A trader may expect Bitcoin to stay above a key price level and use leverage on that view. If Bitcoin falls below the expected level, the position may close. The forced sale adds to market supply and can cause another drop.
For this reason, a price fall in Bitcoin does not always reflect a sudden change in long-term investor views. Some of the move can come from short-term market positions.
Key price levels now matter
Bitcoin’s next move will depend heavily on whether it can hold the area near $76,500 to $77,000. Crypto.news identified this zone as an important short-term support area. Bitcoin had fallen to about $77,078 on August 28 before it found some stability.
If buyers defend that area, Bitcoin could try to move back above $78,000. A stronger recovery could then bring the $80,000 level back into focus.
If the support zone fails, however, traders may look toward lower levels. Analysts cited by crypto.news placed the next potential buying area around $72,000 to $74,500.
These levels are not guarantees. Crypto prices can move very fast, especially when markets react to major US economic news.
What comes next for crypto
The main issue for Bitcoin and the wider crypto market is now the Federal Reserve’s next policy decision. Traders will watch new US inflation data and other economic reports for clues about whether a September rate hike is likely.
For now, the market has received a clear warning from the Fed: inflation remains a major concern. That message has reduced some of the optimism that helped Bitcoin rise above $81,000 earlier this week.
Bitcoin’s move below $78,000 is therefore more than a simple price decline. It reflects a wider change in market expectations. ETF flows have weakened, leverage has added to selling pressure, and traders now face greater uncertainty over US interest rates.
The broader crypto market has also felt the impact. Ethereum fell to $2,430, while several major altcoins posted losses of up to 4.2% over 24 hours. Global crypto market capitalisation fell to $3.07 trillion.
For Bitcoin, the next test is simple: can buyers protect the $76,500–$77,000 area and push the price back above $78,000? A strong defence could calm the market. A clear break below that zone could lead to more pressure.
For now, the message from August 29 is clear. Bitcoin remains highly sensitive to US monetary policy, and Kevin Warsh’s inflation warning has given traders a new reason to stay cautious.
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