Bitcoin Drops 3% Amid Kevin Warsh’s Jackson Hole Hawkish Speech

Bitcoin and the overall crypto market cap are down 3.23% and 2.97%, respectively, in the past 24 hours after the Fed delivered a hawkish outlook at today’s Jackson Hole event. Ethereum and XRP moved in tandem, falling 2.7% and 4.89% over the same time period.Notably, Jackson Hole is an international conference that hosts various financial players to discuss macroeconomic policy. It provides possible future directions for the US Federal Reserve, which has historically moved markets in either direction.Today’s event was Kevin Warsh’s first as Fed Chair, and he said the Fed still has work to do on inflation.Key Fed notes that affected BTC, ETH, and XRPWarsh began by noting that the economy remains strong and resilient, with unemployment (currently at 4.1%) nearing a multi-decade low.Source: FREDNonetheless, PCE inflation remains at 3.7% in the last year, and 4.1% annualized over the past six months, both well above the Fed’s “firm and fixed” target of 2%. Even more, 54% of the components of the PCE basket have risen by 3% in the past year, suggesting inflation is still at large.According to Warsh, several signs show that the current financial conditions remain non “restrictive.” These include relatively friendly lending standards, liberal credit markets, and tight credit spreads, as seen below.Source: FREDFuture outlook Warsh says the Fed is committed to achieving its 2% inflation target, with a “predominant focus on prices.”“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.”More importantly, he discouraged the markets from looking to the Fed for forward guidance, saying this strategy has “overstayed its welcome.”Crypto market reactionFollowing the speech, investors assumed a risk-off attitude, causing Bitcoin to pull away from the $80K resistance line to trade at $77,812. Long liquidations also mounted to $138 million of the total $185 million.Source: CoinMarketCapETH and XRP also retreated to trade at $2,420 and $1.36, respectively. Long liquidations for the overall crypto market totaled $350.94 million of the total $467.81 million.For Bitcoin, the next major resistance lies at $76,996. However, CoinPedia has explored why this retracement was expected and why it presents a premium buy opportunity ahead of the next leg up.