Bitcoin holds $79,500 as US CPI, PPI test Fed rate path

Bitcoin traded near $79,500 on Sept. 7 as traders awaited US inflation data that will set the Federal Reserve's September rate decision.

Interest-rate futures priced a roughly 57 percent probability of a quarter-point hike at the Sept. 15-16 FOMC meeting after August nonfarm payrolls rose 162,000, nearly triple the 56,000 forecast, according to rate market pricing.

Bitcoin briefly climbed above $81,000 before the jobs report, then slid below $80,000 afterward to an intraday low near $78,600 before steadying around $79,000. The pullback tracked gold, which fell 0.94 percent to $4,431 as the dollar and Treasury yields rose on the stronger employment data.

The US releases producer and consumer price data this week, followed by a Treasury auction, ahead of the Fed's Sept. 15-16 meeting. Hotter-than-expected inflation would reinforce hike bets and pressure Bitcoin, while a cooler print could ease those expectations and open a path back above $80,000.

The inflation prints are the decisive input for the September decision. Dovish remarks from Fed Governor Waller had earlier cooled hike expectations, but a labor market that added 162,000 jobs in August, with the unemployment rate holding at 4.1 percent, revived them. The consumer price index in particular will determine whether the Fed follows through with tightening, while the Treasury auction adds a separate source of pressure on bond yields and liquidity that can spill into risk assets.

The rate repricing has moved other markets in ways that feed back into Bitcoin. USD/JPY traded weakly below 155.50 on Sept. 7, down nearly 5 percent from late-July highs, as Bank of Japan Governor Kazuo Ueda flagged possible further hikes at the Sept. 17-18 meeting. Narrowing US-Japan yield spreads have kept the yen firm, and the softer dollar tone against the yen has done little to offset the pressure on Bitcoin from higher US rate expectations.

For Bitcoin, the key levels frame the risk. A daily close back above $80,000 would signal buyers regaining control after last week's rejection, while a break below the $78,600 intraday low could open a test of deeper support. The data releases this week, not chart patterns, are likely to decide which level gets tested first.

This article is for informational purposes only and does not constitute investment advice.