Bitcoin holds near $80K as Fed hike bets rise, ETF inflows continue

Bitcoin BTC was trading just below $80,000 on Monday after retreating from levels above $82,000 reached last week.

The cryptocurrency has remained relatively resilient despite stronger-than-expected US employment data, rising Treasury yields and renewed concerns over interest rates, while continued inflows into spot Bitcoin ETFs have provided support.

Bitcoin faces resistance near $80,000

Bitcoin was changing hands at around $79,105 on Monday. The cryptocurrency climbed above $82,000 last week before the August US jobs report showed that employers added 162,000 jobs, well above expectations of 55,000. The unemployment rate remained unchanged at 4.1%.

The stronger labor market data increased expectations that the Federal Reserve could raise interest rates at its Sept. 16 meeting. CME’s FedWatch tool showed an implied probability of around 60% for a 25-basis-point hike.

Higher Treasury yields and a stronger US dollar weighed on Bitcoin and other rate-sensitive assets following the report. LMAX Group Market Strategist Joel Kruger said in a Block report that Bitcoin had shown “exceptional resilience” despite several potential catalysts for a correction.

Kruger also highlighted higher Treasury yields and rising oil prices following renewed US-Iran tensions. He said crypto had absorbed those headwinds without significant technical damage.

QCP Capital identified $80,000 to $82,000 as a local resistance zone, with support around $77,000 to $78,000.

Bitcoin ETF inflows extend positive streak

Investor demand for Bitcoin has remained firm despite uncertainty around the Federal Reserve’s policy outlook.

US spot Bitcoin ETFs recorded $987 million in inflows last week, extending their positive streak to three consecutive weeks.

QCP Capital said daily volatility in ETF flows appeared more consistent with traders adjusting positions and waiting for greater clarity from upcoming economic data than with strong directional positioning.

Onchain indicators have also provided a constructive signal.

CryptoQuant analyst Axel Adler Jr. said Bitcoin’s 30-day change in realized capitalization turned positive on Aug. 24 after 87 days in negative territory.

By Sept. 6, the measure had risen to 0.88%, while realized capitalization increased by $9.36 billion over 30 days to $1.068 trillion.

Adler said the increase suggested Bitcoin was changing hands at higher prices and supported the recovery as the cryptocurrency held near $80,000.

Inflation data could shape Fed outlook

The market’s focus now turns to US producer price data due Thursday and August consumer price inflation data scheduled for Friday.

The figures will provide key signals ahead of the Fed’s Sept. 16 policy meeting.

Capital.com Senior Financial Market Analyst Kyle Rodda expects headline CPI to remain at 3.4% year over year, while core CPI is forecast to decline to 2.4%.

A softer core reading could support the case for keeping rates unchanged, while stronger-than-expected inflation could revive rate-hike expectations.

CoinShares Head of Research James Butterfill said in a Cointelegraph report that Bitcoin is “trading like gold again, but the Fed still sets the ceiling” around $80,000.

He argued that recent fund-flow movements reflected investors responding to changes in the interest-rate path rather than abandoning crypto.

Liquidity conditions have also remained relevant.

The US Treasury’s decision to double certain long-dated bond buybacks from $2 billion to $4 billion per operation coincided with Bitcoin’s rise from the low $60,000s to above $80,000 in August.

The expanded buyback program is scheduled to run from Sept. 9 through Nov. 4. Against this backdrop, Standard Chartered has forecast that Bitcoin could reach $100,000 before the end of the year.