Bitcoin Slips Toward $78,000 as Fed Hike Fears, Oil Prices Weigh on Markets

Bitcoin's price fell toward the $78,000 mark on Tuesday, extending a retreat from a three-month high as investors grappled with renewed macroeconomic pressures. A surprisingly strong U.S. jobs report has revived expectations for a Federal Reserve interest rate hike, while a sustained rally in oil prices is adding to inflation worries.

As of 9:06 a.m. ET, the world's largest cryptocurrency was trading at $78,577.5, down 1.1% for the session, according to Investing.com data. The move follows a brief surge above $82,000 last week, which reversed after the release of U.S. employment figures on Friday.

Fed Rate Hike Odds Climb

The primary catalyst for the market's cautious tone was U.S. data showing the economy added 162,000 jobs in August, nearly triple what economists had forecast. The report has pushed the market-implied probability of a 25-basis-point rate hike at the Fed's September 16 meeting to approximately 60%, according to the CME FedWatch Tool.

Higher interest rates typically exert pressure on risk-sensitive assets like Bitcoin by increasing the appeal of fixed-income investments and tightening overall financial conditions. The yield on the 10-year U.S. Treasury note has climbed to around 4.8%. Investors are now closely watching for U.S. producer and consumer inflation data, due out Thursday and Friday respectively, for further clues on the Fed's path.

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Broader Market Context

Compounding the pressure from monetary policy expectations are rising energy costs. Brent crude oil futures climbed above $98 a barrel on Tuesday, a six-week high, amid escalating U.S.-Iran tensions that have stoked fears of supply disruptions.

Despite the recent pullback, Bitcoin has found a floor of support from institutional demand. U.S. spot Bitcoin ETFs recorded net inflows of approximately $1 billion last week, marking their third consecutive week of positive flows. The broader altcoin market, however, showed weakness on Tuesday, with most major tokens trading lower.

• Ethereum (ETH) fell 1% to $2,475.92.
• Solana (SOL) declined nearly 2%.
• Cardano (ADA) slipped by 1.5%.
• XRP was trading roughly flat.