Bitcoin defies oil price spike and rising Fed hike bets after best August since 2017

Bitcoin traded around $78,000 on Tuesday, holding on to most of its August gains despite a jump in oil prices and rising expectations that the Federal Reserve could hike interest rates this month.

Bitcoin gained roughly 25% in August, marking its best August since 2017 and strongest month overall since November 2024, according to LMAX Group Market Strategist Joel Kruger. Since then, renewed escalation between the U.S. and Iran has pushed Brent crude above $90, while Fed Chair Kevin Warsh's Jackson Hole remarks have raised expectations for a September rate hike.

"The resilience is notable given the increasingly difficult cross-asset backdrop, with higher bond yields, a firmer dollar, and renewed geopolitical stress all creating headwinds for risk assets," Kruger told The Block. He argued that the combination of higher oil prices and Warsh's hawkish message is limiting bitcoin's immediate upside, though buyers have continued to step in on dips.

Traders turn to jobs data

Jasper De Maere, OTC trader at crypto market maker Wintermute, also sees bitcoin's recent price action as constructive. BTC briefly moved above $81,000 last week before slipping below $78,000 following Warsh's speech, but finished the week almost flat after a 23% gain the week before. Bitcoin managed to absorb the shift in rate expectations, a selloff in chip stocks, and month-end trading without giving back its breakout, De Maere said, while spot bitcoin ETFs brought in $924 million over nine straight positive sessions before recording a $202 million outflow on Friday.

"Under-allocated investors are providing price support here, with $75k and $82k as two key levels into the FOMC mid September," De Maere said. Wintermute expects bitcoin to remain choppy until the rate decision clears, with resistance around $82,000 and support at $75,000 and $72,000. 

LMAX's Kruger also expects consolidation for now, with $80,000 to $82,820 representing the main area bitcoin needs to clear. A sustained break above that range could open a move back above $100,000, he said.

Traders are now eyeing Friday's U.S. nonfarm payrolls report. Economists expect employment to rise a modest 55,000 in August and the unemployment rate to remain at 4.1%, according to Capital.com Senior Financial Market Analyst Kyle Rodda. "Another weaker-than-expected print may cast doubt on whether the Fed has the stomach to hike rates into a deteriorating labour market," Rodda told The Block.