Bitcoin and S&P 500 Hold Steady as Fed Decision Looms

The Federal Reserve's upcoming rate decision has Bitcoin and the S&P 500 in limbo. Both markets are waiting for clarity on inflation, which will be revealed by the Producer Price Index (PPI) on September 10 and the Consumer Price Index (CPI) on September 11.

Markets currently price a 58-59% probability of a 25 basis point rate hike at the September meeting. The last CPI reading showed inflation at 3.4% year-over-year, well above the Fed's 2% target.

For Bitcoin, technical analysts see its current price action as a test of the 'golden zone,' a Fibonacci retracement area that tends to act as strong support during pullbacks. This zone sits around $78,000-$79,000, where it's currently trading.

A sustained break below $78,000 would put the $76,000 level into play as the next major support, representing a roughly 7.3% drawdown from recent highs.