Bitcoin Holds Near $80K as Fed Rate Hike Odds Jump to 60%

The US economy added 162,000 jobs in August, more than three times the 55,000 economists had forecast.

That single number, released Sept. 5, sent Treasury yields higher, pushed the US dollar up, and knockedBitcoin (BTC) off a weekly high above $82,000. By Sept. 7, Bitcoin was trading near $79,500.
The stronger-than-expected payroll figure immediately changed how traders were thinking about the Federal Reserve’s next meeting. The implied probability of a 25-basis-point rate hike on Sept. 16 climbed to around 60%, accordingto CME Group’s FedWatch tool. The unemployment rate held steady at 4.1%, giving the Fed no reason to ease off.

Rate-sensitive assets tend to struggle when hike expectations rise, and Bitcoin was no exception. The pullback from $82,000 came quickly after the jobs data landed. Despite that, the price held above $79,000 through the weekend, which market observers flagged as notable given the macro backdrop.

Resilience Amid Rising Oil and Yields

LMAX Group market strategist Joel Kruger said Bitcoin had already run hard through August before the jobs report arrived. He told The Block that rising oil prices from the latest escalation between the US and Iran added to the list of headwinds. Kruger said what stood out was that crypto absorbed it all without breaking down technically.

US spot Bitcoinexchange-traded funds (ETFs) recorded $987 million in net inflows last week. That extended their positive flow streak to three consecutive weeks. Analysts at QCP Capital said the daily variation in those flows pointed more to traders adjusting positions ahead of data than to any firm directional conviction. They placed resistance at $80,000 to $82,000 and support at $77,000 to $78,000.
On-chain metrics added a layer of context to the price action. CryptoQuant analyst Axel Adler Jr. reported that the 30-day change in Bitcoin’srealized capitalization turned positive on Aug. 24, ending an 87-day negative stretch. By Sept. 6, it had reached 0.88%, with realized cap rising $9.36 billion over the period to $1.068 trillion. A rising realized cap signals that BTC is changing hands at progressively higher prices, which Adler said supports the recovery narrative at current levels.

Related Article:Is the Bitcoin Bull Market Back? Investors Bet on ‘Higher for Longer’ Rates

CPI and PPI Could Decide the Rate Path

US producer price data is due Thursday, Sept. 11. The August consumer price index follows Friday, Sept. 12. Those two prints are the last major inflation readings the Fed will see before its Sept. 16 decision. Capital(dot)com senior financial market analyst Kyle Rodda said headline CPI is expected to hold at 3.4% year-over-year, with core CPI forecast to slip to 2.4%.

Rodda said a softer core reading could give the Fed enough cover to hold rates where they are. A hotter print would put the September hike back in serious play. If that happens, Bitcoin’s ability to hold the $77,000 to $78,000 support band identifiedby QCP Capital will face a real test.
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