Bitcoin Slips Below $77,000 as Traders Bet on Fed Rate Hike
Bitcoin's price slipped below $77,000 on Thursday, down nearly 2% over 24 hours, as investors repriced their expectations for a Federal Reserve rate hike. The decline was led by Zcash, which dropped around 12% to about $1,134 after unwinding some of its recent gains. Hyperliquid's HYPE fell roughly 7% to just under $79, stretching its weekly loss to about 10%. Other major cryptocurrencies such as Dogecoin and XRP also declined.
Traders are betting on a higher interest rate environment, with the odds of a hike at the September meeting now near 70%, up from roughly a coin flip two weeks ago. This move has drained liquidity from the crypto market, making government debt more competitive and increasing the cost of carrying leverage. The US spot bitcoin ETFs have already shown this trend, with $120 million in outflows on Wednesday.
The market is closely watching August's inflation data, which is due to be released at 8:30 a.m. ET. Headline inflation is expected to rise 3.4% year over year, while core inflation is forecasted to increase by 2.4%. Brent crude prices have also surged above $107 a barrel, up more than 6%, with West Texas Intermediate near $102.