Bitcoin Slips Below $80,000 as Hawkish Fed Bets and Geopolitical Tensions Rise

Bitcoin's price dipped below the $80,000 mark on Monday, retreating from a recent three-month high as macroeconomic pressures and a major network exploit weighed on investor sentiment. The digital asset traded at approximately $79,724.8 in early hours, down about 0.3% for the day, according to Investing.com data.

Macroeconomic Headwinds Mount

The decline follows a stronger-than-expected U.S. employment report from Friday, which showed employers added 162,000 jobs in August, nearly tripling economists' forecasts. The robust data prompted traders to increase bets on a Federal Reserve interest-rate hike at its upcoming September meeting. The probability of a hike rose to roughly 60%, up from 49% before the report, according to the CME FedWatch tool.

Higher interest rates typically dampen the appeal of non-yielding assets like Bitcoin by increasing the opportunity cost of holding them. Adding to the risk-off mood, oil prices climbed, with Brent crude reaching about $97 a barrel amid escalating military tensions between the United States and Iran, raising concerns about broader market stability.

Network Exploit Adds to Concerns

Compounding the negative sentiment, the Bitcoin-linked Liquid Network suffered a significant security breach. The settlement platform halted transactions after an exploit resulted in the withdrawal of approximately $320 million worth of bitcoin from its federation wallet. Liquid Network stated on X that about 4,000 of the 4,200 bitcoin held in the wallet were taken.

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According to the network, the individuals responsible claimed to be "purported white-hat hackers," though their identity and motives remain unclear. In response, exchanges have suspended deposits and withdrawals of Liquid's bitcoin-linked LBTC token.

Market Reaction and Outlook

The recent price drop marks a reversal from last week, when Bitcoin briefly surpassed $82,000. Despite the pullback, institutional interest provided some support, with U.S. spot bitcoin ETFs seeing net inflows of about $1 billion last week, according to data from SoSoValue.

Other major cryptocurrencies also fell amid the cautious trading environment. Ethereum (ETH) lost 0.4%, while XRP and Solana (SOL) each declined by 1.1%. Investors are now looking ahead to key U.S. inflation data later this week for further signals on the Federal Reserve's policy direction.