Bitcoin Falls to $77,400 as Inflation Data Hits Yields
Bitcoin dropped 2.2% to $77,400 after August inflation data exceeded expectations and raised the likelihood of a Federal Reserve rate hike.
Bitcoin trades at $77,400, down from $79,155 on September 9. The asset fell 5.6% from its $82,000 peak on September 4. August core inflation rose 0.3% month over month, beating the 0.2% forecast. The market now prices an 83% chance of a rate hike on September 16. US spot Bitcoin ETFs lost $13.29 million on September 11. This marks the fourth consecutive day of outflows. Long-term holders sold 539,000 Bitcoin in the $77,000 to $80,000 range this year.
Inflation Data Reprices Fed Expectations
Brent crude oil broke $100 per barrel on September 9. Energy costs feed directly into core inflation through transportation and manufacturing. The Federal Reserve’s target rate upper bound stands at 3.75%. A rate hike would push bond yields higher. Higher yields increase the opportunity cost for holding assets with no cash flow. Bitcoin pays no coupon, so rising yields reduce its relative appeal. The VIX index closed at 17.84 on September 10. This represents a 24.6% weekly increase in equity market volatility.
ETF Outflows Remove Passive Buying
ETF redemptions force authorized participants to sell Bitcoin on the spot market. This creates direct selling pressure. The outflow streak ended a period that included $986.9 million in inflows during the week to September 4. Four consecutive days of outflows remove the passive demand that absorbed supply in summer. According to GN markets/crypto (en-US), this shift in flow dynamics is a key driver of the recent decline. The market is no longer seeing net accumulation through institutional vehicles.
Supply Wall Tests Support Levels
Long-term holders sold 539,000 Bitcoin between $77,000 and $80,000 this year. These wallets held coins for more than 155 days. Most acquired their positions well below this price range. Fresh buyers must absorb this supply for Bitcoin to clear $80,000. The $76,500 to $77,000 band now acts as a critical support zone. A close below $76,500 could open the path to $72,000 to $74,000. This represents a 7.0% drop from current levels. Bitcoin implied volatility trades near 40 into the Fed decision. Options traders expect wider price moves over the next 30 days.
