BTC Trades Sideways Ahead of Crucial NFP Report

Bitcoin (BTC) continues to trade sideways around $77,700 after its sharp rally in the second half of August. The institutional demand remains strong, with spot Exchange Traded Funds (ETFs) recording mixed flows so far this week. According to SoSoValue data, these funds saw inflows of $216.70 million on Monday and $101.15 million on Wednesday, but outflows of $201.81 million last Friday and $236.46 million this Tuesday.

Market participants are cautious ahead of the key economic data release on Friday, which will provide fresh clues on the Federal Reserve's (Fed) policy path. The US Nonfarm Payrolls (NFP) report is expected to determine the next leg of BTC's directional move. On the geopolitical front, US-Iran tensions have kept risk appetite tight, with President Donald Trump saying he is prepared to launch another attack on Iran.

Meanwhile, investors are worried that elevated energy prices will rekindle inflationary pressures and force major central banks, including the Fed, to adopt a more hawkish stance. According to CME Group's FedWatch Tool, traders now price in around a 60.2% chance of an interest rate hike in September.