Bitcoin's upward momentum has somewhat slowed after last week's sharp rally accompanied by a strong short squeeze. With a significant portion of leveraged positions accumulated over the short term having been unwound, the market is searching for direction as the possibility of additional interest rate hikes by the U.S. Federal Reserve is being raised again.

■ Short Squeeze Subsides… "Risk of Further Liquidations Decreased"

Charles Schwab recently analyzed in its market outlook that a short squeeze emerged strongly as Bitcoin approached $80,000 at one point. A short squeeze refers to a phenomenon in which investors who bet on price declines are forced to close their positions to limit losses, triggering additional buying. Charles Schwab assessed that after the liquidation of short positions, the risk of additional large-scale liquidations around the current price level has decreased compared with before. However, it also noted that given the sharp rise over a short period, a process of digesting the gains could occur.

■ Weekly Surge of Over 20%… ETF Inflows Also Provide Support

The market points to large-scale short position liquidations as one of the backgrounds of this rally. Bitcoin recorded a gain of more than 20% over the past week, at one point trading above $81,000, during which large leveraged positions were unwound. Inflows into U.S. spot Bitcoin exchange-traded funds (ETFs) also lent strength to the upward trend.

■ Tightening Warning at Jackson Hole… September Hike Odds Rise from 35% to 60%

The macroeconomic environment is once again acting as a burden. Fed Chair Kevin Warsh stated at the economic policy symposium held in Jackson Hole, Wyoming, on the 28th that additional monetary tightening may be necessary if inflation does not fall sufficiently to the Fed's target level. Following Warsh's remarks, the market-implied probability of a benchmark rate hike in September rose from about 35% to around 60%. Short-term U.S. Treasury yields and the dollar's value also rose, weighing on risk assets including Bitcoin.

Bitcoin showed weakness of less than 1% on the day, continuing relatively limited movement following the sharp rally. As forced-liquidation-driven buying like last week's has weakened, future price movements are likely to react more sensitively to spot demand, ETF fund flows, and U.S. rate outlooks.

■ AI Semiconductors Face the Same Fate… Marvel Shares Fall Despite Raised Guidance

A similar trend is appearing in the tech stock market. Growth related to artificial intelligence (AI) and data centers continues, but stock prices face immediate corrections when they fail to meet heightened market expectations. A representative example is Marvell Technology. Marvell raised its annual earnings outlook thanks to growth in custom AI semiconductors and its data center business, yet its shares fell sharply. Marvell raised its fiscal 2027 revenue forecast to $12 billion and expects revenue of approximately $18 billion in fiscal 2028. However, as the substantial revenue contribution from its large-scale custom AI chip business with Google is likely to begin in earnest only from fiscal 2029, the company failed to meet the market's expectations for short-term growth speed.

■ 'Earnings Visibility' Drives Prices… What Lies Ahead

In the end, both the Bitcoin and AI semiconductor markets have entered a stage where actual fund flows and earnings visibility, rather than simple growth expectations, determine prices. As Bitcoin's short-term upward momentum from the short squeeze has weakened, whether spot buying can carry on the upward trend is expected to be a key variable. In particular, if the Fed's monetary policy path tilts back toward tightening, rising dollar and U.S. Treasury yields could amplify volatility across risk assets broadly, making it necessary to monitor inflation and employment indicators going forward.

[This article is intended solely for informational purposes and does not recommend the purchase or sale of virtual assets. Virtual assets involve high price volatility and market uncertainty, so caution is warranted regarding expanded volatility from large on-chain movements, and the final judgment and responsibility for all investments rest with the investor. This article was partially assisted by AI.]