Bitcoin Tests $77,000 Threshold Amid Fed Hike Fears and Zcash Slide

Bitcoin slipped below the $77,000 mark on Thursday, sending the market’s largest asset into a broader pullback. The cryptocurrency fell almost 2 % in 24 hours and has dropped more than 5 % over the past week, extending a trend that has been fueled by rising Treasury yields, climbing oil prices and the latest U.S. producer inflation data.

The PPI report for August showed producer prices up 5.4 % year‑over‑year, a figure that has pushed expectations for a Federal Reserve rate hike in September to roughly 70 %—a sharp jump from the near‑even odds seen just two weeks ago. Interest‑rate futures now price the probability of a September hike at about 70 %, underscoring the market’s appetite for tighter monetary policy.

Bitcoin’s price is hovering just above the key technical support level identified by Bitget analyst Lewis Huang at $76,270. With BTC trading less than $800 above that level, another wave of selling could threaten the August recovery structure that has kept the currency above its mid‑June trough.

The broader crypto market mirrored Bitcoin’s weakness. The CoinDesk 20 index fell roughly 3 %, and 95 of the 100 assets in the CoinDesk 100 ended the session lower. Altcoins also suffered heavy selling: HYPE, DOGE and XRP all saw significant declines.

Zcash (ZEC) was among the hardest‑hit large‑cap tokens, falling about 12 % to $1,134. The drop erased part of ZEC’s recent gains, though the privacy‑focused coin remains roughly 34 % higher on a weekly basis and nearly 145 % higher over the past month. The sharp reversal followed an unusually strong rally that pushed Zcash above $1,000, and the recent profit‑taking has been amplified by a crowded bearish position that has seen short interest rise to 72 %.

Zcash’s derivatives market has also gained prominence. The open interest in altcoin perpetual futures has recently surpassed Bitcoin’s for the first time since December 2024, with Zcash contributing heavily to the increase in altcoin leverage.

As the market continues to digest the Fed’s outlook and the latest inflation data, Bitcoin’s ability to hold above the $76,270 support level will be a critical barometer for the next phase of the rally. If the currency can break above that threshold, it may signal a shift back toward the upside; failure to hold could trigger a deeper retracement and further pressure on the broader crypto ecosystem.