Bitcoin slipped to $77,132.6 on Wednesday as renewed U.S.-Iran fighting and rising bond yields weighed on risk assets, cutting into a rally that added nearly 25% in August. Traders now watch Friday's nonfarm payrolls report for clues on the Federal Reserve's next rate move, while a large holder cost-basis band between $83,000 and $86,000 looms as the market's next test.
Bitcoin edged 0.2% lower to $77,132.6 by 18:07 ET, extending losses after a strong month. It had rallied nearly 25% in August, before renewed U.S.-Iran military action and persistent uncertainty over interest rates drove the pullback.
U.S.-Iran strikes rattle risk appetite
The U.S. and Iran traded a fresh round of strikes overnight Tuesday, remaining at odds over the Strait of Hormuz. Both sides signaled little intent to deescalate: President Donald Trump threatened to attack Iran's oil infrastructure, while Tehran warned of more attacks on U.S. bases in the Gulf. Oil prices rose sharply, marking the worst U.S.-Iran hostilities in over a month.
Rate jitters compound the pressure
Higher oil prices fed concerns over energy-driven inflation, and government bond yields across Japan, Australia, the U.S. and Europe surged on the notion. Markets are rapidly increasing bets that the Fed will hike rates in September, since inflation remains above the bank's 2% annual target. Focus this week turns to Friday's nonfarm payrolls data, which could shape those bets further. Renewed buying from top corporate holder Strategy offered only limited support, even as the company marked its first Bitcoin purchase in two months.
A short squeeze fueled August's rally
According to Glassnode, a short squeeze on Aug. 19 marked the largest single-day short liquidation event the firm has recorded since 2019, forcing bears to cover as bitcoin broke past resistance. Bears lost $1.74 billion that day. U.S. spot Bitcoin ETFs later absorbed more than $2.2 billion in net inflows over the following week, the strongest weekly intake of the year.
$83,000-$86,000 band looms as next test
Glassnode notes that roughly 1.05 million bitcoin held by long-term holders sit in a cost-basis band between $83,000 and $86,000, a level analysts expect to test whether patient holders sell near breakeven or hold on. Elsewhere, Ether fell 1.2% to $2,384.54. Dogecoin shed 0.3% in the same session.
Sources: Cryptocurrency News, Bitcoin News
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