Bitcoin loses ground as rate fears return
Bitcoin fell below $79,000 on Tuesday, extending the pressure that has kept the largest cryptocurrency below the $80,000 level for roughly two weeks.
BTC traded around $78,800, down more than 1% on the day while retaining a modest weekly gain. The move came as traders continued to reassess U.S. monetary policy following a much stronger-than-expected August employment report.
The U.S. Bureau of Labor Statistics reported that nonfarm payroll employment increased by 162,000 in August, while unemployment remained at 4.1%. The figure was far above the roughly 53,000 jobs economists had expected.
The stronger labor-market reading has pushed the market toward a more hawkish Federal Reserve outlook. Traders are now pricing approximately a 60% probability of a 25-basis-point rate increase at the Fed's upcoming meeting.
Zcash leads major crypto losses
The broader cryptocurrency market moved lower alongside Bitcoin, with every major token in the supplied market snapshot posting losses on Tuesday.
Zcash (ZEC) suffered the steepest decline among the large-cap assets, falling nearly 5% to about $1,125. Despite the daily sell-off, Zcash remained the strongest weekly performer among large-cap cryptocurrencies, retaining a gain of approximately 33% over seven days.
Hyperliquid's HYPE declined more than 3% to around $84, while Solana (SOL) dropped more than 2% to just above $103. Both tokens gave up their entire weekly gains during the latest decline.
Ether also weakened, falling roughly 1% to just below $2,482. XRP slipped to approximately $1.39, while TRON (TRX) was nearly unchanged around $0.33.
Dogecoin and BNB showed greater resilience. Both declined by only a fraction of a percent while maintaining weekly gains of nearly 9% and more than 7%, respectively.
Treasury yields put pressure on crypto
U.S. Treasury yields remain one of the main macro factors weighing on risk assets. The 10-year Treasury yield was near 4.8%, following the stronger August employment figures.
The labor report changed expectations for Federal Reserve policy because stronger employment can reduce pressure on policymakers to ease financial conditions. The market is therefore watching the upcoming inflation figures closely for evidence that could either reinforce or weaken the case for a September rate increase.
The Federal Reserve's next policy meeting is scheduled for Sept. 15–16, according to the central bank's official calendar. The Fed's previous July meeting left the target range unchanged, although three voting members preferred a quarter-point increase.
For crypto markets, higher interest-rate expectations can create a tougher environment because investors may become more selective about holding risk-sensitive assets when traditional fixed-income yields are elevated.
Dollar and gold show mixed signals
The dollar index eased to just below 99 for a second consecutive session as traders positioned for the possibility of tighter monetary policy from the Bank of Japan.
Gold, meanwhile, moved above $4,430, while Brent crude remained above $97 per barrel, reaching a six-week high in the market snapshot.
The elevated oil price is another concern for inflation expectations. Rising energy costs can add pressure to consumer prices, creating an additional complication for central banks that are attempting to bring inflation under control.
Recent market reporting also shows Brent trading above $97 amid continuing U.S.-Iran tensions and risks surrounding the Strait of Hormuz.
Oil adds another inflation risk
Oil markets have become an important part of the macro backdrop for crypto. Brent crude remained above $97 after developments involving Iran and Oman raised hopes of progress on managing shipping through the Strait of Hormuz.
The combination of elevated crude prices and a stronger U.S. employment report leaves traders facing two potentially inflationary signals at the same time: a resilient labor market and higher energy costs.
That backdrop makes the upcoming inflation releases particularly important. The U.S. Producer Price Index for August is scheduled for Sept. 10, followed by the Consumer Price Index on Sept. 11, according to the Bureau of Labor Statistics' release calendar.
The July CPI report showed headline inflation rising 3.4% year over year, while core CPI increased 2.5%. The August CPI release is scheduled for Friday at 8:30 a.m. Eastern time.
Analysts see resilience despite the pressure
Despite the recent weakness, some market strategists argue that Bitcoin has not suffered significant technical deterioration.
Joel Kruger, market strategist at LMAX Group, said, "Crypto has absorbed these headwinds without suffering meaningful technical damage."
His assessment is consistent with the broader market picture: Bitcoin has fallen below $80,000 but remains above the lower levels established during the August rally.
Yusuf Fakhro, a partner at ARP Digital, also pointed to improving sentiment in crypto derivatives markets. He said the "persistent fear that defined the entire bear phase has drained out," while noting that long-term holders turned into net buyers in late August for the first time during the move.
Bitcoin's $77K level comes into focus
The next major test for Bitcoin could come from the inflation data rather than another cryptocurrency-specific catalyst.
A stronger-than-expected core inflation reading could push expectations for a September Fed hike toward two-thirds, according to the supplied market analysis. Such a repricing would put additional pressure on Bitcoin's nearby support zone, with $77,000 identified as an important range floor.
Conversely, softer inflation data could reduce the pressure created by the recent jobs report and give traders more room to reassess the Fed's policy outlook.
For now, Bitcoin remains caught between two forces: a strong U.S. labor market that has increased rate-hike expectations and signs of continued resilience within the crypto market itself. The next two inflation releases are likely to provide the clearest signal before the Fed's Sept. 15–16 decision.
