Today’s selloff followed another rejection at major resistance as markets raised the odds of an earlier rate hike.

Dear reader,

It is Friday, so let’s recap what changed.

Bitcoin had a strong but volatile week. Today’s sharp selloff gives us the clearest lesson.

Bitcoin once again rejected its 50-week moving average. This is one of the most important long-term resistance areas on the chart.

At the same time, markets started pricing a greater chance of an earlier Federal Reserve rate hike following Kevin Warsh’s Jackson Hole speech.

This week’s PCE inflation report showed that prices rose 3.7% over the past year. Core PCE, which removes food and energy, rose 3.3%.

Both remain well above the Fed’s 2% target.

In his Jackson Hole speech, Fed Chair Kevin Warsh made it clear that inflation remains the main concern.

He described the 2% target as firm and fixed. He also said that broad financial conditions are difficult to describe as restrictive.

That matters.

The economy remains strong enough for the Fed to focus on inflation. Consumer spending has held up. The labor market remains stable. Business investment is growing, with much of that spending linked to artificial intelligence and technology infrastructure.

Warsh did not promise a September rate hike. But he kept rate increases in play if inflation does not move toward 2% with enough speed.

Markets reacted quickly.

Before the speech, futures markets placed the chance of a September rate hike near 35%. By Friday afternoon, that probability had moved above 50%.

September is now a live meeting. It is not a certain hike.

The data between now and the September 15 and 16 meeting will decide a great deal.

Warsh also wants a quieter Fed. He does not want investors looking to the central bank for their next trade.

That may mean less guidance and more market movement around each major economic report.

Bitcoin remains above its 200-day moving average. The weekly RSI also remains above 50.

These are meaningful improvements.

But Bitcoin has now tested and rejected the 50-week moving average more than once. Until that area is reclaimed on a weekly basis, I do not consider the next bull market fully confirmed.

Part of the recent rally appeared to come from a short squeeze after the U.S. Treasury announced that it would at least double the size of its long-term bond buybacks.

That helped calm longer-term yields and supported risk assets.

Warsh’s inflation message pushed in the other direction. Markets began to price an earlier rate hike, and Bitcoin sold off from major technical resistance.

This is why we look at more than the Bitcoin chart.

Macro conditions, rates, bonds, sentiment, and market structure all affect the final decision.

We have already mapped the exact Bitcoin confirmation, buy zone, reduction, and invalidation levels inside Sonderberg Research.

The public conclusion is simpler.

Bitcoin’s structure has improved, but the market has not confirmed a clean breakout. After a fast rally into major resistance, this is not the time to confuse a higher price with lower risk.

The Fear and Greed Index has moved back into greed.

That does not mean the market must fall. It shows how quickly investor behavior can change.

U.S. spot Bitcoin ETFs recorded approximately $1.1 billion to $1.2 billion in net inflows so far this week, extending their positive run to nine consecutive trading sessions.

Those flows are supportive. They also do not remove the resistance above the market.

This is where many investors repeat the same expensive mistake.

They are afraid when prices are lower and the potential reward is more attractive. They wait for certainty.

Then price rallies sharply.

The market starts to feel safe, so they finally want to buy. But by then, the risk and reward have already changed.

For someone managing a seven-figure portfolio, repeating that pattern can become extremely expensive.

The useful question is not whether the market feels comfortable.

The useful question is whether the evidence still supports the position at the current price.

Next week brings several reports that could move rate expectations again.

On Tuesday, we get the JOLTS job-openings report and the ISM Manufacturing PMI.

On Wednesday, the Fed releases its Beige Book.

Thursday brings productivity data, labor-cost data, and the ISM Services PMI.

The main event arrives Friday with the August jobs report.

A strong labor report could give the Fed more room to raise rates while it fights inflation. A weaker report could reduce the chance of a September move.

That makes next week’s data especially important.

Bitcoin’s structure is better than it was.

It is above its 200-day moving average. Weekly momentum has improved. ETF flows remain positive. Relative strength against stocks is starting to turn.

But the 50-week moving average is still acting as resistance. Altcoins have not confirmed a broader move. USDT dominance is testing support. Rate expectations have also become less friendly for risk assets.

My view is constructive, but not fully confirmed.

Even if a new bull phase has started, it will not move higher in a straight line. There will be corrections. There will be failed breakouts. There will also be periods when the best decision is to wait.

That is why having a plan matters.

The free newsletter will continue to explain what matters, what I am watching, and where investors tend to make mistakes.

The exact decision levels, portfolio context, alerts, and ongoing updates remain inside Sonderberg Research.

If you manage a six- or seven-figure portfolio and want a clear system rather than another market opinion, you can see whether a Strategy Call is a fit here:

Economic: Dallas Fed Manufacturing Index
Earnings: Science Applications International Corp. (SAIC), LexinFintech Holdings Ltd. (LX), Cango Inc. (CANG)

Economic: S and P Global U.S. Manufacturing PMI Final, ISM Manufacturing PMI, JOLTS Job Openings, Construction Spending, Dallas Fed Services Index
Earnings: Palo Alto Networks Inc. (PANW), Dell Technologies Inc. (DELL), Credo Technology Group Holding Ltd. (CRDO), MongoDB Inc. (MDB), GitLab Inc. (GTLB), NIO Inc. (NIO)

Economic: ADP National Employment Report, MBA Mortgage Applications Index, Factory Orders, Federal Reserve Beige Book, EIA Crude Oil Inventories
Earnings: Broadcom Inc. (AVGO), Snowflake Inc. (SNOW), Hewlett Packard Enterprise Co. (HPE), NetApp Inc. (NTAP), Brown Forman Corp. (BF.B), Five Below Inc. (FIVE)

Economic: Initial Jobless Claims, U.S. Trade Balance, Challenger Job Cuts, S and P Global U.S. Services PMI Final, ISM Services PMI
Earnings: Copart Inc. (CPRT), Samsara Inc. (IOT), Zscaler Inc. (ZS), Lululemon Athletica Inc. (LULU), Guidewire Software Inc. (GWRE), DocuSign Inc. (DOCU), UiPath Inc. (PATH), Toro Company (TTC)

Economic: Nonfarm Payrolls, Unemployment Rate, Average Hourly Earnings, Labor Force Participation Rate
Earnings: KNOT Offshore Partners LP (KNOP)

Everything you just read is what we do every single day at Sonderberg Research. The difference is timing and depth.

By the time analysis like this reaches a newsletter, the move has often already started. My private clients don't wait. They get:

If you're managing $100K+ and you're done reacting emotionally to a market that punishes hesitation, let's talk.

On a private Strategy Call, we'll map exactly where you are in this cycle, the 3 institutional signals that flag the top before retail sees it, and where your portfolio is currently exposed.

No pitch. Just a clear, unemotional plan for your capital.

→ Apply for your Strategy Call: sonderbergresearch.com

Want my full story, track record and ledger? Visit diegosonderberg.com.

Kind regards,
Diego Sonderberg

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