Bitcoin Falls Below $79K as Fed Rate Hike Bets Pressure Crypto

Bitcoin fell below $79,000 on Tuesday as rising U.S. Treasury yields and growing expectations of a Federal Reserve interest rate hike weighed on the broader cryptocurrency market.

Bitcoin traded just under $78,800, dropping more than 1% over the past 24 hours while retaining a modest weekly gain. The world's largest cryptocurrency has now spent roughly two weeks struggling to secure a close above the key $80,000 level, although it has largely preserved its August rally.

Zcash recorded the steepest decline among major cryptocurrencies, falling nearly 5% to around $1,125. Despite the pullback, ZEC remained up 33% over seven days, making it the strongest weekly performer among large-cap tokens.

Hyperliquid's HYPE declined more than 3% to approximately $84, while Solana dropped over 2% to slightly above $103. Both tokens erased their weekly gains. Ether slipped 1% to below $2,482, while XRP eased to $1.39 and Tron remained broadly unchanged near $0.33. Dogecoin and BNB showed greater resilience, declining only slightly while maintaining weekly gains of nearly 9% and more than 7%, respectively.

Pressure on crypto prices came as the U.S. 10-year Treasury yield hovered near 4.8% following stronger-than-expected August employment data. U.S. payrolls increased by 162,000, far exceeding forecasts of roughly 53,000.

Markets are now pricing around a 60% probability that the Federal Reserve will raise interest rates by 25 basis points at next week's meeting. Higher rates and bond yields typically reduce investor appetite for risk assets such as Bitcoin and other cryptocurrencies.

LMAX Group market strategist Joel Kruger said crypto had absorbed the macroeconomic pressure without experiencing significant technical deterioration.

Meanwhile, Brent crude remained above $97 per barrel amid continued U.S.-Iran tensions, adding to inflation concerns ahead of key U.S. data.

Investors will closely watch Thursday's producer price index and Friday's consumer price index. A hotter-than-expected core inflation reading could strengthen Fed rate hike expectations and increase pressure on Bitcoin's key support zone around $77,000.