Bitcoin Faces Catastrophic 19.3% Drop if Key Support Fails

Bitcoin's price has been under pressure as it continues to trade below its key support level of $77,057. The cryptocurrency, which is down 1.80% over the past 24 hours, traded at $77,118.98 as of 9:51 a.m. ET on Wednesday, September 2.

The market has surrendered $1,557 in price or 2.0% since Monday morning without a meaningful bounce, and it's now facing a potential 19.3% drop to the support level below current price.

The thesis of this forecast is that Bitcoin is no longer trading as a monetary hedge or sovereign-risk asset but rather as the highest-beta expression of the front end of the U.S. rate curve. With September hike odds above 66%, every dollar of BTC price action is a derivative of what the Federal Reserve does on September 16.

The correlation between Bitcoin and the U.S. 10-year Treasury yield is evident as yields hit an intraday high of 4.814% on Wednesday, its highest level since November 2023. The market read rising inflation expectations as forcing the FOMC to tighten rather than as currency erosion.