Market Commentary

FED / JACKSON HOLE: WARSH SURPRISES WITH A RESTRICTIVE TONE

The week's macro event was the Jackson Hole symposium, and in particular Fed Chair Kevin Warsh's keynote on Friday. Warsh called inflation "concerning" and stated the central bank "still has work to do," but declined to give guidance on the September meeting. The most relevant move was in the curve: the 2-year Treasury yield jumped more than 6 basis points to 4.298%, while the long end (30-year, ~5.2%) held flat. That twist indicates the market bought his anti-inflation commitment.

The shift in rate expectations is the week's central data point. The odds of a 25-basis-point hike at the September 15–16 meeting — which would be the first since 2023 — went from practically ruled out a month ago to close to 50% after the speech (CME FedWatch). It is a scenario most risk assets have not priced in, and its implication for Digital Assets is direct: it raises the opportunity cost of holding non-yielding assets and explains the profit-taking in BTC into the close. As a structural nuance, this year's symposium theme — "Financial Innovation: Implications for Payments and Policy" — was the first to place digital payments at the center of the discussion, a sign that the sector's infrastructure is gaining relevance in the Fed's thinking despite the adverse rate message.

INFLATION: PCE CONFIRMS PERSISTENCE

The PCE price index — the Fed's preferred inflation gauge — released August 26, reinforced Warsh's message. July PCE inflation rose to 3.7% annually, and core (excluding food and energy) stood at 3.3%, with a monthly advance of 0.2% in line with expectations. Both readings remain above the Fed's 2% target, confirming that inflation stays sticky despite prior months' moderation.

The picture grew more complicated on the activity side. The Chicago PMI released this week collapsed to 47.1 from 57.6, well below consensus and in contraction territory. The combination — inflation reaccelerating with activity cooling — is the one that leaves the Fed least room, and it blurs the prolonged-pause-en-route-to-cuts scenario the market had been pricing. It is a change of tone investors must incorporate.

GEOPOLITICS: TWO COST-PRESSURE FRONTS

Two geopolitical fronts push in the same direction: supply-side cost pressure, precisely as the Fed debates raising rates. In the Strait of Hormuz, the conflict with Iran reached six months and this week saw attacks on two commercial vessels; crude stays contained near USD 82, but a jump above USD 105–110 would reintroduce inflationary pressure directly. On the trade front, the U.S. imposed 50% tariffs on Canadian goods on August 22, with Canadian retaliation taking effect September 8.

REGULATION: HEADING TO SEPTEMBER 15

On the regulatory front, with no developments during the week, attention stays fixed on the CLARITY Act cloture motion of September 15, which coincides with the Fed meeting. The combination of both events in the same window — monetary policy and regulatory framework — remains, in our view, the quarter's most relevant decision point.

Bitcoin (BTC): Trades around USD 77,800 (+0.4%), after a week whose technical read is more nuanced than the weekly change suggests. Mid-week it reached USD 80,000–81,000 for the first time since May, but was rejected at one of the densest resistance zones in its structure — the USD 80,000–83,000 range, where the 50-week moving average (unbroken since November 2025), the May high, and the largest cost-basis accumulation in the distribution (close to 1.29 million BTC) coincide. After Warsh's speech it ceded close to 3.3% and lost the first support around USD 78,000. The asymmetry is relevant: a weekly close above the zone would turn the cycle thesis bullish, but below USD 78,000 supply thins markedly toward USD 68,000. Support at USD 78,000 (to reclaim) and USD 68,000; resistance at USD 80,000–83,000.

Ethereum (ETH): Trades around USD 2,440 (+1.7%), consolidating above the USD 2,400 zone with the strongest institutional backing of the three assets in absolute terms. Its ETF flows accelerated versus the prior week, again channeled through BlackRock. The asset holds the USD 2,500–2,650 zone as its next relevant resistance. Support at USD 2,300–2,380; resistance at USD 2,500–2,650.

Solana (SOL): Trades around USD 105.00 (+15.4%), the week's largest percentage advance. It decisively broke the USD 100 resistance and reached USD 110 before moderating, driven by unprecedented institutional flow into its ETF, consolidating its transition from laggard to leader. The relative strength index (RSI) closed overbought (~80), which counsels caution against a possible near-term cooling. Support at USD 96–100; resistance at USD 110–115.

This week's market structure confirms that the recovery rests increasingly on spot demand and less on speculative leverage: the support came from ETF flows, which absorbed the impact of the Fed's restrictive turn without price ceding disorderly. It is a relevant quality difference from the prior week, when the advance rested on a mechanical short squeeze.

The reaction to Warsh's speech, however, revealed the vulnerability of leverage. Following his remarks, according to liquidation data, the market recorded close to USD 220 million in liquidations in a single hour, concentrated mostly in long positions (bullish bets) and led by BTC and ETH. It is the mirror image of the prior week's short squeeze — when it was the bears being liquidated — and a reminder that, despite the strength of spot flow, leveraged positions chasing the rally remain sensitive to a macro turn.

Expected volatility for the week ahead: high. Warsh's restrictive turn and the persistence of PCE reintroduce macro sensitivity just as the calendar intensifies: the September 4 jobs report opens the sequence of data that will define the tone of the Fed meeting. SOL's overbought positioning adds a near-term technical factor.

BTC: +USD 1,126.40MM, with four consecutive sessions of inflows led by BlackRock's IBIT (+208.90, +284.40, +200.80, +277.60). Two nuances matter. The constructive one: ETFs kept buying during the pullback — absorbing supply on the day BTC fell from above USD 80,000 — which is deliberate allocation rather than price-chasing, and confirms flow sustained after the short squeeze. The cautionary one: the daily magnitude declined toward the close, so while demand is real, it does not yet constitute a consolidated trend.

ETH: +USD 713.60MM, an acceleration even versus the already strong prior week, with rising inflows Monday through Thursday (+115.60, +179.80, +192.40, +225.80). BlackRock's ETHA was again the dominant engine, with Fidelity's FETH contributing consistently. It is the firmest confirmation yet of the relative-allocation signal in favor of ETH we have been tracking: institutional demand for ETH is not only holding but deepening.

SOL: +USD 125.40MM, a record inflow that multiplies the prior week's flow by close to seven. Demand concentrated in Bitwise's BSOL (+25.00, +20.40, +2.60, +40.20), with contributions from Grayscale's GSOL and Fidelity's FSOL. It is the week's most significant flow development: institutional interest in SOL, which for weeks we described as intermittent and incipient, took a qualitative leap that accompanied — and largely drove — the price breakout.