The broader crypto market moved lower Tuesday, with all major tokens posting declines. Still, most cryptocurrencies remained in the green for the week as traders increasingly bet on a Federal Reserve rate hike next week, with the odds now around 60%.
Bitcoin hovered below $78,800, down more than 1% over the day, while its seven-day performance remained marginally positive, according to CoinDesk data.
BTC has struggled to regain the $80,000 level on a closing basis for nearly two weeks. Even so, the cryptocurrency has managed to preserve much of the strong advance recorded during August.
Zcash was the biggest loser among major cryptocurrencies, falling almost 5% to approximately $1,125. Despite the pullback, Zcash is still up 33% over the past week, giving it the largest seven-day gain among large-cap tokens. HYPE, the native token of Hyperliquid, declined more than 3% to around $84, while Solana lost over 2% to trade slightly above $103. Both assets have now wiped out their gains for the week.
Ether fell roughly 1% to just below $2,482, while XRP slipped to about $1.39. Tron remained nearly flat around $0.33. Dogecoin and BNB were among the strongest performers, falling only slightly while retaining weekly gains of nearly 9% and more than 7%, respectively.
The latest pressure on cryptocurrencies is coming largely from the bond market. The 10-year U.S. Treasury yield remained close to 4.8% after August employment figures showed 162,000 jobs were added, substantially above expectations of around 53,000. Traders are now seeing roughly a 60% likelihood of a 25-basis-point Fed hike at next week’s meeting, a scenario that appeared extremely unlikely earlier in the year.
The dollar index edged below 99 for a second consecutive session as traders positioned for potential monetary tightening from the Bank of Japan. Gold, meanwhile, climbed past $4,430.
Joel Kruger, market strategist at LMAX Group, said crypto markets have so far weathered the unfavorable macro backdrop without experiencing significant technical deterioration.
Oil prices also remained elevated, with Brent crude holding above $97 per barrel at a six-week high. Iran said it was close to reaching an agreement with Oman concerning shipping through the Strait of Hormuz, following a weekend of U.S. and Iranian strikes against vessels and military targets. Higher crude prices could continue to support inflationary pressure ahead of Friday’s consumer-price data.
Asian markets delivered mixed results at the start of the week. South Korea’s Kospi jumped nearly 5% to its highest level since late July, while Japan’s Nikkei gained more than 2% as investors bought AI-linked memory-chip stocks. Hong Kong’s Hang Seng moved in the opposite direction, declining almost 1%.
Yusuf Fakhro, a partner at ARP Digital, said options-market sentiment has improved, with the persistent fear seen throughout the previous bear market largely fading. He also noted that long-term holders became net buyers in late August for the first time during the current market move.
The next major catalysts are Thursday’s producer-price index and Friday’s consumer-price index, both of which arrive ahead of the Fed’s policy meeting. A hotter-than-expected core CPI reading could lift expectations for a rate increase toward two-thirds and increase the risk of Bitcoin falling toward its $77,000 support zone.
