Bitcoin rebounds to $79,000 as Middle East tensions roil risk assets

Bitcoin fell below $77,000 on renewed Middle East tensions before rebounding to $79,000, with market capitalization near $1.58 trillion and dominance above 58.5 percent.

"Traders should avoid excessive leverage given elevated macroeconomic uncertainty," Vikram Subburaj, chief executive officer of Giottus, said. He put Bitcoin's near-term support at $77,000 and identified the $79,400 to $80,800 range as a key resistance zone.

The dip came as Iran retaliated following a U.S. attack on an Iranian island in the Strait of Hormuz, a key oil shipping route. West Texas Intermediate futures rose about 2 percent to $85.10 a barrel, while Brent crude climbed 1.9 percent to $92.39. Gold fell 0.8 percent to $4,418 an ounce, and Nasdaq futures slipped 0.5 percent. Major Asian stock markets also traded lower as risk appetite weakened across broader markets.

Bitcoin still delivered stronger returns than other assets, up more than 24 percent in August — its best August since 2017 — compared with gold's 9 percent rise and the Nasdaq's 4 percent advance over the same period. U.S. spot Bitcoin ETFs posted $2.8 billion of net inflows over the past two weeks, supporting the rally. Recent strength has also been linked to expectations for increased liquidity after the Treasury Department expanded its bond buyback program.

The U.S. employment report due Sept. 4 is the next key variable for digital assets. Federal Reserve Chair Kevin Warsh said at the Jackson Hole symposium on Aug. 28 that inflation had not been contained enough and that current financial conditions could hardly be described as restrictive. Markets now price about a 58 percent chance of a rate increase in September, with roughly 1.5 rate hikes reflected in year-end pricing, according to Lloyd Chan, an FX strategist at MUFG.

Major altcoins were slightly weaker, with XRP down 0.8 percent and Solana lower by 0.6 percent. Ether traded near $2,500, while BNB held below $700. XRP lost the $1.40 support level. Monero was a rare exception, trading above $500.

Bitcoin's resilience relative to traditional assets reflects continued institutional demand through spot ETFs, even as geopolitical risk escalates. A sustained conflict escalation could prolong downside pressure on risk assets, but the token's strong August performance may continue to attract inflows if the employment report supports a softer Fed stance. The divergence between Bitcoin and most altcoins also highlights potential short-term risks for DeFi liquidity and exchange activity if risk appetite continues to deteriorate.

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