Bitcoin Falls Below $77K as Zcash Leads Crypto Losses on Fed Hike Bets

Bitcoin slipped below $77,000, falling nearly 2% over 24 hours after August producer prices climbed 5.4%, above the 5.1% forecast. The hotter-than-expected inflation reading pushed 30-year Treasury yields to their highest level in 19 years.

The broader crypto market suffered steeper losses. The CoinDesk 20 index declined about 3%, nearly twice bitcoin’s drop, while 95 of the CoinDesk 100 assets finished the period lower. Bitcoin has now lost more than 5% over the past week.

Traders spent Thursday adjusting their expectations for next week’s Federal Reserve meeting, with markets increasingly pricing in a potential rate hike.

Zcash suffered the biggest decline among major tokens, dropping roughly 12% to around $1,134. Despite the pullback, Zcash remains about 34% higher over the past week and nearly 145% above its level a month ago.

Hyperliquid’s HYPE fell approximately 7% to just below $79, extending its weekly decline to around 10%. Dogecoin dropped about 6% to 8 cents, while XRP declined roughly 3% to $1.34 and is down nearly 7% over seven days. Solana also fell more than 3%, slipping below the $100 mark.

Ether performed better than many other major cryptocurrencies, losing nearly 2% to trade around $2,445, leaving it down less than 3% for the week. BNB declined slightly more than 1% to approximately $710. Tron was the only major token to remain largely unchanged, holding around 34 cents while maintaining a weekly gain of more than 3%.

Bitget analyst Lewis Huang had previously identified $76,270 as an important technical support level. With bitcoin now below $77,000, the cryptocurrency is less than $800 above that threshold.

Energy markets also added to inflation concerns. Brent crude jumped more than 6% to above $107 a barrel, while West Texas Intermediate approached $102. Rising energy prices could add further pressure to inflation figures being monitored by the Federal Reserve.

Treasury yields moved higher as well, with the 10-year yield approaching 5% and the two-year yield climbing above 4.5%.

Elsewhere, gold slipped toward $4,330, while the U.S. dollar index strengthened near 99. The S&P 500 ended lower around 7,594, marking its fourth consecutive decline. Asian equity markets followed the risk-off move, with Japan down nearly 2%, South Korea falling more than 3% and Hong Kong declining close to 1%.

Higher real yields can weigh on crypto markets in two ways. They make government bonds more attractive compared with non-yielding assets such as bitcoin, while also increasing the cost of maintaining leveraged positions.

U.S. spot bitcoin ETFs reflected some of the pressure, recording $120 million in outflows on Wednesday, more than twice the previous day’s withdrawals. Ether, XRP and solana investment products, however, recorded inflows during the same session.

The August CPI report is due at 8:30 a.m. ET, with headline inflation expected to reach 3.4% year over year and core inflation forecast at 2.4%. Interest-rate futures are currently pricing in roughly a 70% chance of a rate hike at the Sept. 15-16 Federal Reserve meeting, up from around 50% two weeks earlier.

“Markets are already positioned for a more hawkish Fed and a likely rate increase,” said Joel Kruger, market strategist at LMAX Group.

Bitcoin has not fallen below the $76,270 level since the rally that began in August, making that support zone increasingly important if selling pressure continues.

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