Bitcoin Slips Below $80,000 as Hawkish Fed Bets and Oil Surge Weigh on Crypto

Bitcoin's price fell below the $80,000 threshold on Monday, pressured by a combination of macroeconomic headwinds that dampened investor appetite for risk assets. A surprisingly strong U.S. employment report has reignited speculation of a near-term Federal Reserve interest rate hike, while escalating military tensions between the U.S. and Iran have pushed oil prices to multi-month highs.

As of Monday, Bitcoin was trading at approximately $79,381.99, a decline of about 0.5% for the day, according to data from Investing.com. The move marks a reversal from last week, when the cryptocurrency briefly surpassed $82,000 to hit a more than three-month high of $82,178.6 on Thursday before retreating.

Macro Pressures Mount

Investor sentiment soured following a U.S. jobs report on Friday that far exceeded expectations. The economy added 162,000 jobs in August, nearly triple what economists had forecast, keeping the unemployment rate at 4.1%. In response, the market-implied probability of a Fed rate hike at its September 15-16 meeting jumped from 49% to approximately 60%, according to the CME FedWatch Tool.

Higher interest rates typically create a challenging environment for non-yielding assets like Bitcoin by increasing the opportunity cost of holding them. Adding to the risk-off tone, Brent crude oil prices climbed to around $97 a barrel on Monday amid concerns over potential supply disruptions in the Middle East. The source reported that the U.S. military conducted strikes on three Iranian oil tankers on Saturday, following an alleged ballistic missile attack by Iranian forces on a U.S. naval vessel.

Ad

Security Breach and Market Outlook

Adding to market jitters, the Liquid Network, a settlement platform for cryptocurrency exchanges, suspended new transaction processing after a significant security breach. The network reported that approximately 4,000 Bitcoin, valued at around $320 million, were moved from its federated wallet. The individual claiming responsibility is described as a "so-called white-hat hacker," but their identity and motives remain unclear.

Despite the recent price drop, institutional interest has provided some underlying support. Data from SoSoValue showed that U.S.-based spot Bitcoin ETFs recorded net inflows of about $1 billion last week. Investors are now closely watching upcoming U.S. inflation data, with the Producer Price Index (PPI) due on Thursday and the Consumer Price Index (CPI) on Friday, for further clues on the Fed's policy path.

The broader altcoin market was mixed amid the cautious sentiment. Ethereum (ETH) saw a slight gain of 0.2% to trade at $2,499.78, while XRP fell 0.79% and Solana (SOL) declined 1.1%.