Bitcoin rebounds as crypto markets shake off early pressure from oil and Fed hike bets

Investors are adjusting to stronger-than-expected August employment data, which has lifted expectations for a Fed rate hike this month.

Bitcoin and other major crypto assets recovered from early losses Tuesday as easing oil prices helped improve market sentiment.

Bitcoin rose back to $78,800 after falling below $78,000 earlier in the session, while XRP gained 3.6%, Ether advanced 1.2% and Solana added 1%.

The recovery came as US stocks pared declines, with the Nasdaq down only 0.1% by midday. Brent crude pulled back to about $97.5 after briefly approaching $100, although geopolitical tensions remained elevated following fresh hostilities involving the US and Iran and attacks by Tehran-backed Houthis on Saudi energy infrastructure.

Markets remain focused on inflation and monetary policy after stronger-than-expected August jobs data increased the likelihood of a Fed rate hike.

Traders currently price a 58.4% chance of a hike this month, while PPI and CPI reports due Thursday and Friday are expected to influence the central bank’s decision.

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