Bitcoin Slides Below $77,000 as Fed Rate-Hike Bets Build

Brent crude’s surge above $110 a barrel revived concerns that higher energy costs could keep U.S. inflation elevated. Investors turned their attention to core consumer price index data, the final major inflation test before the Federal Reserve’s rate decision next week. A hotter-than-expected reading could strengthen the case for a rate increase, lift Treasury yields and pressure valuations across equities and cryptocurrencies.

Bitcoin fell below $79,000 ahead of the CPI release and briefly slipped under $77,000 as the U.S. 10-year Treasury yield approached 5%. Market-implied odds of a Federal Reserve increase next week climbed to about 70%. The cryptocurrency later rose as investors digested the inflation figures, though trading remained volatile while markets reassessed the likely policy path and the near-term outlook for risk assets.

Stronger-than-expected US employment data for August prompted investors to reassess the Federal Reserve’s September policy decision, weighing on equities as concern about another rate increase resurfaced. Still, reports differed over whether the jobs release materially changed the odds of a hike. Cryptocurrencies proved comparatively resilient, with Bitcoin avoiding the broader retreat seen across risk assets.

Bitcoin recovered toward $79,000 and held near that threshold, while one market estimate put the probability of a September rate increase at 58%. Zcash outperformed sharply, gaining 45% over the past week. The privacy-focused cryptocurrency also drew attention after Zcash-linked exchange-traded products recorded a $500 million haul, adding institutional-flow momentum to its rally.

The Federal Reserve’s interest-rate outlook is a key driver for global risk assets because higher borrowing costs generally weigh on equities and cryptocurrency valuations. Fed Governor Christopher Waller signaled support for keeping rates unchanged, encouraging investors to anticipate a possible pause in the tightening cycle and renew exposure to volatile assets including Bitcoin.

Waller’s latest remarks lifted both US stocks and cryptocurrency markets, sending Bitcoin sharply higher and triggering a short squeeze. Bearish derivatives positions were forcibly closed as prices moved against traders, with cryptocurrency liquidations exceeding $415 million over a short period. The resulting rush to cover short positions added momentum to Bitcoin’s advance.

The Federal Reserve’s interest-rate path shapes borrowing costs and liquidity across global markets, making it especially important for cryptocurrencies and other assets sensitive to risk appetite. Bitcoin often comes under pressure alongside equities when traders expect tighter policy. Some market observers warn that another Fed increase, as economic conditions and asset prices weaken, could prove to be a policy mistake.

As of Sept. 9, implied odds of a Federal Reserve rate increase remained near 60%, weighing on bitcoin, gold and stocks. Bitcoin slipped below $79,000, while Zcash led declines among major crypto assets. Investors are now watching incoming inflation and employment data, along with signals from Fed officials, for evidence that tighter policy expectations could drain more liquidity from digital assets and broader financial markets.

Bitcoin typically struggles when oil, Treasury yields and the dollar rise because tighter financial conditions reduce demand for speculative assets. That backdrop sharpened after renewed U.S.-Iran tensions pushed Brent crude above $90 a barrel and Federal Reserve Chair Kevin Warsh’s Jackson Hole remarks increased expectations for a September rate increase. Its ability to retain August’s breakout therefore suggests dip buyers and under-allocated investors are still providing support, even as the broader cross-asset environment turns less favorable.

Bitcoin traded near $78,000 on Sept. 1 after gaining roughly 25% in August, its best August since 2017 and strongest month since November 2024, according to LMAX Group strategist Joel Kruger. It briefly topped $81,000 the previous week. Wintermute sees support at $75,000 and $72,000 and resistance near $82,000 ahead of the Federal Reserve’s Sept. 16 meeting. Attention now shifts to the Sept. 4 U.S. nonfarm-payrolls report: economists expect 55,000 new jobs in August and unemployment to hold at 4.1%, figures that could reshape rate-hike expectations.

Bitcoin and other cryptocurrencies are sensitive to shifts in U.S. monetary-policy expectations because higher interest rates tend to lift Treasury yields and the dollar, reducing the appeal of non-yielding risk assets. The latest retreat shows traders reassessing the Federal Reserve’s policy path, with emerging bets on a rate increase weighing on momentum from the crypto market’s recent rebound.

As of Aug. 27, Bitcoin fell below $79,000 while XRP led losses among major cryptocurrencies. Most large tokens were flat or lower over the previous 24 hours, with Solana and BNB the notable exceptions. Despite the pullback, Bitcoin and XRP retained significant weekly gains, indicating that the latest bout of rate-driven selling had not erased their broader advance.

Cryptocurrencies are high-risk assets whose price movements are closely tied to Federal Reserve monetary policy. Inflation pressures have returned to the forefront since the U.S. Bureau of Labor Statistics released its latest producer-price data. The figures directly influence interest-rate decisions by the Federal Open Market Committee and could determine global capital flows and whether the bull market in digital assets can continue.

Bitcoin and Ether’s rallies slowed markedly on Tuesday, July 14, 2026, after the inflation data. Investors expect the Fed to leave its benchmark interest rate unchanged at its policy meeting later this month. The latest data from decentralized prediction platform Polymarket put the probability of no rate change at 93%, as markets adopted a more cautious response to macroeconomic signals.

Bitcoin is highly sensitive to interest rates and dollar liquidity. When US Treasury yields rise, non-yielding assets become relatively less attractive to hold. The latest decline coincided with losses in stocks and gold, reflecting traders’ reassessment of the Federal Reserve’s rate-hike path amid inflation concerns. The move was therefore not confined to the crypto market.

Around May 15, Bitcoin fell about 3% in a single day, breaking below $79,000 and touching $78,000 before sliding below $77,000 to a low of about $76,000. Liquidations of bullish crypto positions reached $500 million, while SOL and XRP each dropped about 5%. US Treasury yields neared 20-year highs, although Bitcoin’s implied volatility remained low.

Bitcoin is the world's largest crypto asset by market capitalization, and its price movements often influence crypto-linked stocks such as Coinbase and Circle. Rising expectations of a Federal Reserve rate increase prompted investors to retreat from volatile risk assets, making Bitcoin's ability to hold $70,000 an important gauge of market risk appetite.

Bitcoin fell below $70,000 during the latest pullback in risk assets, dropping to about $69,000 intraday. The selling spread to US-listed crypto stocks, with stablecoin issuer Circle plunging 16% and cryptocurrency exchange Coinbase also weakening. The moves showed that concerns about Fed policy were weighing on the crypto market at the time of the report.

Bitcoin is highly sensitive to expectations for U.S. interest rates and liquidity, while Federal Reserve rate decisions often drive crypto-asset valuations. Markets are now focused on how Chair Jerome Powell will assess changes in inflation and oil prices. His remarks could shape expectations for rate cuts and determine whether capital continues flowing into risk assets.

Bitcoin briefly touched $76,000 ahead of the Federal Open Market Committee's April 29 decision before retreating to around $74,000, including a short-lived intraday drop below $75,000. Ether, meanwhile, approached $2,200. Traders turned cautious and watched for signs of a hawkish tilt in Powell's post-meeting comments.