Bitcoin fell below $78,000 on Monday as hawkish comments from Federal Reserve Chair Kevin Warsh lifted rate-hike bets and fresh U.S.-Iran strikes on Larak Island pushed oil prices higher. The cryptocurrency remained on track for a near-24% gain in August despite the pullback.
Bitcoin fell below $78,000 on Monday, extending losses from the weekend as hawkish signals from Federal Reserve Chair Kevin Warsh and renewed U.S.-Iran military action sent oil prices surging. Bitcoin fell 0.3% to $78,007.1 by 02:23 ET, touching an intraday low of $77,396.0. Still, the cryptocurrency remained on track to add nearly 24% in August after a rebound rally in recent weeks.
Warsh's Jackson Hole remarks lift rate-hike bets
Speaking at the Jackson Hole economic symposium on Friday, Warsh said the central bank remained committed to its 2% annual inflation target. He did not explicitly mention plans for a rate hike, but his comments were widely viewed as hawkish. As a result, markets are now pricing a 60.4% chance the Fed will raise rates by 25 basis points in September, according to CME Fedwatch data. Nonfarm payrolls data due later this week is expected to offer more direct signals on the central bank's plans.
Higher rates bode poorly for speculative assets such as Bitcoin. Yet the August rally itself was fueled chiefly by a sharp drop in Treasury yields following a bond-market intervention by the U.S. Treasury.
Strikes on Larak Island jolt oil markets
Renewed U.S.-Iran conflict added to the pressure on risk assets. U.S. forces struck two Iranian missile launchers on Larak Island in the Strait of Hormuz — the first such attack since late July — and Iran responded with ballistic missile strikes on U.S. bases across the Middle East. CENTCOM rejected Iran's description of the U.S. action as an act of aggression. Nearly all incoming missiles were intercepted, and no significant impacts have been reported so far, according to Fox News.
Brent crude futures rose more than 2% to trade above $90 per barrel on the news. WTI crude also gained more than 2%, trading above $85.50. Bitcoin briefly fell more than 2% to a low of $77,161 before recovering to trade near $77,813, even as Bitcoin futures open interest rose 0.65% to $53.88 billion within the hour, according to CoinGlass data.
Broader crypto retreats alongside Bitcoin
Other major cryptocurrencies also slipped Monday. Ether fell 0.7% to $2,444.27, still up nearly 30% for August, while XRP dropped 2.7% despite a 27.5% monthly gain. Solana and Cardano remained higher for the month, up 40% and 15% respectively.
Sources: Cryptocurrency News, CoinGape
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