Bitcoin Faces Hawkish Fed Expectations as Oil Prices Soar

Bitcoin faces stiff resistance as it heads into September, still battling key resistance below $86,000 after markets flipped hawkish on Federal Reserve policy. The coming week will bring the release of multiple US employment indexes, each likely to shape expectations for policy changes from the Fed.

The Fed is already in the spotlight after last week's Jackson Hole economic symposium, which featured its first keynote speech from new chair Kevin Warsh. Warsh described current data as too high, despite July's lower-than-expected results for the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) index.

Markets responded with increased expectations of interest-rate hikes, reverting to majority odds for a 0.25% hike at the Fed's September meeting, per data from CME Group's FedWatch Tool. At the time of writing, these odds stand at just below 60%, up from 41.4% last week.

Oil markets are also experiencing renewed volatility amid fresh US strikes on Iran and an unprecedented US-Venezuela oil-supply deal. Oil prices have spiked, with Brent crude back above $90 per barrel and US WTI crude passing $85 per barrel.