Bitcoin Struggles to Hold Above $80,000 as Traders Take Profits

Bitcoin's recent rally has stalled as it struggles to hold above $80,000. The cryptocurrency briefly climbed past $81,000 earlier this week but has since slipped back below $80,000 as traders take profits.

The rebound that pushed Bitcoin above the $80,000 threshold was triggered by a Treasury Department announcement last week to at least double the size of liquidity-support buybacks for longer-dated government debt. This move helped lower longer-term Treasury yields and increased concerns about the dollar, boosting demand for alternative assets like Bitcoin.

Despite this momentum, investors are keeping a close eye on inflation data and Federal Reserve Chair Kevin Warsh's comments regarding interest rates. The personal consumption expenditures price index rose 3.7% in July from a year earlier, well above the Fed's 2% target.

Institutional demand has also provided support for Bitcoin, with U.S.-listed spot Bitcoin exchange-traded funds recording about $314 million of net inflows on Tuesday.

Analysts are watching whether buyers can push decisively through the current resistance area of $80,000 to $83,000. A sustained break above this range could open a path toward $95,000 to $100,000, according to Tony Sycamore, an IG Australia analyst.