Bitcoin Breakout Fades Amid Choppy US Demand, Hawkish Fed

Bitcoin's recent surge above $80,000 has faltered due to inconsistent demand from US investors and hawkish comments from the Federal Reserve. The cryptocurrency's exchange-traded funds saw both inflows and outflows in August, with recent weeks showing more outflows. The seven-day average of the Coinbase premium, which compares prices on the US exchange to international ones, has remained negative for over four months, indicating weak demand.

Glassnode noted that the ETF inflows reached $290 million per day during the rally, but trading activity was subdued compared to previous bull runs. US Federal Reserve Chairman Kevin Warsh's hawkish speech at the Jackson Hole symposium reignited concerns about potential interest rate hikes to curb inflation, scheduled for their next meeting on September 15-16.

Bitcoin also faces a potential ceiling, as long-term holders are targeting $83,000 and $86,000 for selling. Analyst Tony Sycamore at IG Australia believes that much of the August rally was driven by short covering, leaving positioning close to flat. Bitcoin is currently trading around $77,700.