Bitcoin and Gold Plunge on Rising Interest Rate Hike Prospects

Bitcoin (BTC) plummeted below $80,000 on Friday after an earlier rejection near $81,500. The largest cryptocurrency by market capitalization is eyeing short-term support at $79,000, which could encourage buying.

The price drop comes as investors reassess the Federal Reserve's interest rate hike prospects following the release of the August US Nonfarm Payrolls (NFP) data. The NFP surged by 162K in August, beating consensus forecasts of 56K and signaling unexpected labor market resilience.

According to the FedWatch tool, there is now a 60% probability that the Federal Reserve will raise interest rates to the 3.75%-4.00% range from 49% a day earlier. This shift in sentiment has caused Bitcoin and Gold to shed their gains as investors price in higher interest rates.

Gold (XAU/USD) is trading amid growing headwinds, with the price now testing support at $4,400. The metal surged to $4,511 on Thursday but cooled down following the NFP report.