Bitcoin remains steady around the US$77,000 mark as cryptocurrency markets prepare for a crucial week. Traders are growing increasingly confident that the US Federal Reserve will announce an interest rate hike on Wednesday.
As of the morning of September 14, the leading cryptocurrency was trading between US$77,000 and US$77,200, showing little change over the previous 24 hours and currently tracking about 6% lower than its three-month peak of over US$82,000 achieved earlier this month.
Ethereum has demonstrated better resilience, trading close to US$2,540, while Solana is stable just above US$101. According to CoinDesk’s latest market data, Ethereum has risen approximately 2.9%, Solana is up 1.4%, and Bitcoin has seen a slight decline.
The strength in major alternative coins follows a turbulent week marked by hotter inflation data in the US, sharply rising Treasury yields, and soaring oil prices, which have continually pushed Bitcoin down during its attempts to bounce back to US$80,000.
Focus on Fed’s Rate Decision
The immediate attention lies on the Federal Reserve’s meeting scheduled for September 15-16.
Markets are leaning heavily towards anticipating a 25-basis-point rate hike after consumer prices in August increased by 0.4% month-over-month and 3.4% year-over-year.
Interest-rate markets have assigned an approximately 85% chance of an increase as the meeting approaches, a sharp rise from earlier expectations this month.
This shift is crucial for Bitcoin since rising interest rates and Treasury yields render yield-bearing investments more attractive, while making speculative and leveraged positions more expensive to sustain.
Goldman Sachs has reportedly revised its previous stance and now predicts a 25-basis-point increase this week, citing persistent inflation as a strong reason for further tightening.
Bitcoin briefly surged to nearly US$80,000 following Friday’s inflation data, only to retract much of that gain, reflecting the uncertainty surrounding traders’ positioning before the Fed’s decision.
US$81,700: Key Resistance Level for Bitcoin
From a technical standpoint, the critical challenge rests above US$80,000.
CryptoQuant suggests that Bitcoin needs to surpass around US$81,700 for the market to confidently declare a new bullish trend has started.
The on-chain analytics firm noted a constructive underlying trend for Bitcoin following its approximately 24% rebound over the last two weeks, but cautioned that significant resistance still looms above.
Beyond the US$81,700 level, additional resistance can be found around US$83,600 and US$88,700.
The downward scenario is equally significant.
CryptoQuant has identified US$70,000 as a potential support level, followed by a much stronger accumulation zone between US$62,000 and US$65,000, which has seen long-term holders amass about 476,000 Bitcoin this year.
This positions Bitcoin within a well-defined resistance range of US$80,000 to US$82,000, with increasingly critical support levels beneath its current price.
Institutional Selling Pressure Eases
There are indications that the institutional selling pressure observed last week may be lessening.
US-based Bitcoin exchange-traded funds saw significant outflows earlier in the week, totaling US$120.2 million on September 9 and US$282.7 million on September 10.
The most recent session on September 11 recorded only a modest net outflow of about US$13 million, according to ETF data from DefiLlama, indicating a significant slowdown in institutional redemptions as the weekend approached.
This trend will be closely monitored when Wall Street reopens.
Flows into and out of Bitcoin ETFs have become increasingly vital indicators of institutional demand, especially when large sums move in or out of these funds over consecutive periods.
Upcoming Fed Decision in Focus
For the cryptocurrency markets, the next significant catalyst is not expected to arise from blockchain developments.
As the week commences, Bitcoin is maintaining its recent recovery but lacks the momentum to decisively break through the US$80,000 barrier, while Ethereum and several other major tokens are beginning to exhibit relative strength.
The Federal Reserve’s decision on Wednesday could be pivotal in determining whether this situation shifts.
A 25-basis-point rise is widely anticipated, making the key query what Federal Reserve Chair Kevin Warsh indicates about future rate trajectories beyond September.
A more hawkish statement could increase pressure on Bitcoin and similar risk assets, particularly if Treasury yields continue to rise.
Conversely, if the Fed implements the expected increase without hinting at an aggressive series of hikes, markets may conclude that the bulk of the negative news has already been factored in.