Bitcoin Retreats From a Three-Month High Near $81,000 as Bullish Momentum Begins to Slow

(MENAFN- MENAFNEditorial) Bitcoin is correcting to around $78,000 after briefly reaching $81,326, its highest level in more than three months. Compared with the preceding rally of nearly 25%, the current pullback remains relatively modest and has not been sufficient to disrupt the recovery structure. However, Bitcoin’s repeated failure to hold above $80,000 suggests that buying momentum is slowing as the cryptocurrency approaches a major resistance area.
The recent rally was supported by a combination of factors. The U.S. Treasury’s announcement that it would at least double the size of its long-term bond buybacks helped ease yields in the short term, while adding pressure on the U.S. dollar and reviving concerns about the erosion of fiat currency values. Against this backdrop, investors returned to gold and Bitcoin as assets with limited supply. More favorable regulatory signals in the United States also helped improve sentiment across the broader cryptocurrency market.
More importantly, institutional capital has genuinely returned. From August 17 to 27, U.S. spot Bitcoin ETFs recorded nine consecutive sessions of net inflows totaling more than $3 billion. This indicates that the recovery was not driven entirely by speculative activity. However, the streak ended on August 28, when the funds registered approximately $202 million in net outflows. The amount was not large enough to create a clear bearish signal, but it partly explains why Bitcoin lost momentum as it approached $81,000.
Selling pressure intensified following hawkish remarks from Federal Reserve Chair Kevin Warsh at Jackson Hole. He emphasized that inflation remained considerably above the Fed’s 2% target and that financial conditions were not yet genuinely restrictive. His comments prompted markets to increase expectations of a potential rate hike in September, pushing Treasury yields and the U.S. dollar higher. Bitcoin consequently retreated quickly from the $80,000 area, once again demonstrating its sensitivity to liquidity conditions and U.S. monetary policy.
Even so, the current price action still resembles a period of cooling after an overly rapid advance rather than a clear reversal. Bitcoin has retained most of its recent gains, while selling pressure has not been strong enough to push the price back into its previous consolidation range. The issue is that momentum from the short-covering wave has weakened considerably. During the early stage of the rally, nearly $3 billion in short positions across the cryptocurrency market were liquidated, forcing traders betting on lower prices to buy back assets. As this catalyst fades, further upside will depend more heavily on genuine demand from ETFs and the spot market.
Meanwhile, on-chain data show that Bitcoin held for three to six months has an average cost basis of around $81,800, while the cost basis for the one-to-two-year cohort stands near $84,000. This means that as the price moves into the $82,000–$84,000 area, some investors who were previously trapped in losing positions may take the opportunity to sell once they return to breakeven. Bitcoin will therefore require sufficiently strong demand, rather than sentiment alone, to produce a sustainable breakout.
In my view, the factors supporting Bitcoin have not disappeared, but the easiest part of the recovery may already be behind us. After rebounding sharply from below $65,000, the market now faces an important test: whether institutional capital will continue absorbing supply above $80,000. The current pullback does not yet signal the end of the recovery, but it does suggest that Bitcoin will need more than the narrative of a weaker U.S. dollar to reach higher price levels.

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