Bitcoin holds gains despite oil surge and Fed rate hike expectations

Bitcoin traded around $78,000 on Tuesday, maintaining most of its August gains despite rising oil prices and growing expectations of a Federal Reserve interest rate hike this month.

The cryptocurrency gained roughly 25% in August, its best August since 2017 and strongest month overall since November 2024, according to LMAX Group Market Strategist Joel Kruger.

Market pressures fail to dent Bitcoin’s momentum

Recent geopolitical tensions between the U.S. and Iran pushed Brent crude oil prices above $90, while comments from Fed Chair Kevin Warsh at Jackson Hole increased bets on a September rate hike. Despite these headwinds, Bitcoin has shown resilience, with buyers stepping in during price dips, Kruger noted.

Higher bond yields, a stronger U.S. dollar, and renewed geopolitical stress typically create challenges for risk assets like Bitcoin, but the cryptocurrency has so far absorbed these pressures.

Key levels and trader focus

Jasper De Maere, an OTC trader at crypto market maker Wintermute, described Bitcoin’s recent price action as constructive. After briefly rising above $81,000 last week, Bitcoin slipped below $78,000 following Warsh’s speech but finished the week nearly flat after a 23% gain the prior week.

De Maere highlighted that Bitcoin managed to withstand shifting rate expectations, a selloff in chip stocks, and month-end trading without reversing its breakout. He noted that under-allocated investors are providing support, with $75,000 and $82,000 as key price levels ahead of the Federal Open Market Committee (FOMC) meeting in mid-September.

Wintermute expects Bitcoin to remain volatile until the Fed’s rate decision, with resistance around $82,000 and support at $75,000 and $72,000. Kruger added that a sustained break above $80,000 to $82,820 could pave the way for a move back above $100,000.

Jobs report in focus

Traders are now turning their attention to Friday’s U.S. nonfarm payrolls report. Economists expect employment to rise by 55,000 in August, with the unemployment rate holding at 4.1%, according to Capital.com Senior Financial Market Analyst Kyle Rodda. A weaker-than-expected jobs report could raise doubts about the Fed’s willingness to hike rates amid a slowing labor market.

Sources

• The Block