Crypto Market Slides as Zcash Sinks and Bitcoin Breaks Below $77,000

Bitcoin slipped below $77,000 as stronger-than-expected producer inflation increased pressure on risk assets and boosted expectations for a Federal Reserve rate hike. BTC fell nearly 2% over 24 hours and has lost more than 5% over the past week.

August producer prices climbed 5.4%, topping the 5.1% forecast and pushing 30-year Treasury yields to a 19-year high. The wider crypto market declined even more sharply, with the CoinDesk 20 dropping about 3% and 95 of the CoinDesk 100 assets finishing lower.

The inflation reading prompted traders to reassess their expectations for next week’s Fed meeting, with the probability of a rate increase moving higher.

Zcash led the losses among major cryptocurrencies, plunging roughly 12% to around $1,134. Despite the decline, the token remains up about 34% over the past week and nearly 145% over the last month.

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

Ether declined nearly 2% to around $2,445, keeping its weekly loss below 3%. BNB slipped slightly more than 1% to roughly $710. Tron was the only major token to remain flat, holding near 34 cents and retaining a weekly gain of more than 3%.

Bitget analyst Lewis Huang previously identified $76,270 as a key technical support for bitcoin. BTC is now less than $800 above that level, making it an important threshold if selling intensifies.

Energy markets added to inflation concerns. Brent crude surged more than 6% above $107 a barrel, while West Texas Intermediate approached $102. Higher oil prices could add further inflationary pressure as the Fed evaluates its next policy decision.

Treasury yields also climbed, with the 10-year yield approaching 5% and the two-year yield moving above 4.5%. Gold declined toward $4,330, while the dollar index strengthened near 99.

U.S. equities weakened as well, with the S&P 500 falling to around 7,594 for a fourth consecutive decline. Asian markets followed the downturn, with Japan losing nearly 2%, South Korea falling more than 3% and Hong Kong declining close to 1%.

Rising real yields can weigh on bitcoin and other cryptocurrencies by making government bonds more competitive with non-yielding assets. Higher yields can also increase the cost of maintaining leveraged positions, adding pressure to speculative markets.

U.S. spot bitcoin ETFs recorded $120 million in outflows on Wednesday, more than twice the previous day’s amount. Ether, XRP and solana funds, however, recorded inflows during the same session.

The August CPI report is scheduled for release at 8:30 a.m. ET. Economists expect headline inflation to rise 3.4% year over year, while core inflation is projected at 2.4%.

Interest-rate futures are now pricing in nearly a 70% chance of a Fed rate hike at the Sept. 15-16 meeting, compared with roughly 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 remained above $76,270 since its August rally began, making the level a critical support zone to watch if the market’s decline continues.