Bitcoin falls below $79,000 ahead of US inflation data. Here’s what’s weighing on crypto

Bitcoin fell below the $79,000 mark on Tuesday as strong U.S. employment data has revived expectations of tighter Federal Reserve policy, while escalating U.S.–Iran tensions and higher oil prices are adding to inflation concerns ahead of this week’s U.S. inflation data. The cryptocurrency was trading at $78,339 mark.

In the past 24 hours, Bitcoin was down 1.43% and Ethereum was down 0.70% to trade at $2,479 mark. Among the major altcoins, BNB and Tron were up 1.18% and 0.33% respectively. Among the major altcoins, XRP, Solana, Hyperliquid, Dogecoin, and Cardano corrected upto 2.99%.

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Why is Bitcoin falling?

Riya Sehgal, Research Analyst, Delta Exchange said despite the price weakness, institutional flows remain a supportive factor. U.S. spot Bitcoin ETFs attracted nearly $987 million last week, while Ether ETFs added roughly $218 million, suggesting the recent pullback has not yet been accompanied by a broader retreat in institutional demand.

For now, crypto is caught between resilient institutional demand and growing macro pressure, Sehgal further said.

The global crypto market capitalisation edged down 0.99% to $2.67 trillion, according to CoinMarketCap. The crypto fear and greed index today is at 71, suggesting the market sentiment is greedy. Bitcoin short-term whales just hit a record $9.07B in unrealised profit, the highest since 2016. Ethereum’s next big upgrade will let users pay transaction fees in stablecoin instead of ETH, said CoinDCX Research Team.

Nischal Shetty, founder, WazirX said the bigger signal for crypto is oil, which has moved above $92 and could keep inflation and Fed expectations elevated. For Bitcoin, the next move may therefore depend less on today's modest equity weakness and more on whether rising energy prices translate into tighter liquidity expectations.

With oil rising and US equities under modest pressure, the next move in crypto could be amplified by derivatives positioning, Shetty said.

Over the past week, Bitcoin and Ethereum were up 0.74% and 1.435 respectively. Among the major altcoins, BNB, XRP, Solana, Tron, Hyperliquid, Dogecoin, and Cardano gained upto 10.41%.

Avinash Shekhar, Co-Founder & CEO, Pi42 said for the broader market, the important signal will be how Bitcoin behaves after a pullback rather than how quickly it reaches the next target. A market that can absorb short-term pressure, hold key support levels and then recover without excessive leverage would provide a stronger foundation for the next leg of the rally.

Here is what other experts say

CoinSwitch Markets Desk: For now, $80K remains the key level to watch. If BTC can hold and build support above this level, the next major resistance sits near $82.8K with a potential move toward $90K if macro conditions turn more supportive.

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Prateek Gupta, Head of Business, Mudrex: CryptoQuant’s spot apparent-demand metric and Coinbase Premium Index have turned negative, signaling weaker retail buying. Yet BTC has shown strong resilience even as the yen gained 3.7% in just three sessions. For now, Bitcoin needs to reclaim $80,000 to regain momentum, with $78,400 as key support

Vikram Subburaj, CEO, Giottus: The cryptocurrency has struggled to establish itself above $80,000 as investors turn cautious ahead of US inflation data.Investors should remain measured ahead of inflation data and avoid excessive leverage

Vikas Gupta, Country Manager - India, Bybit: The current weakness reflects a combination of profit-taking, cautious positioning and continued sensitivity to global liquidity conditions. With Bitcoin trading below a level that had provided near-term support, market participants are likely to watch whether the asset can reclaim this zone or establish a new support base at lower levels.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)