Oil Price Surge and Soaring Government Bond Yields… Will Bitcoin Defend the $77,000 Support Level?

▲ US, Iran, International Oil Prices, Bitcoin (BTC)/AI Generated Image ©

Amidst soaring global government bond yields and geopolitical risks emanating from the Middle East, which have fueled macroeconomic tightening fears, Bitcoin has surrendered key support levels and is facing the risk of falling below the $77,000 mark.

According to CoinMarketCap, a cryptocurrency market data aggregator, on September 2 (local time), Bitcoin (BTC) recorded $77,260.71, down 2.04% from 24 hours prior, showing a distinct weakness compared to the broader market's flat performance. Bitcoin displayed high correlations of 0.86 with the S&P 500 index and 0.89 with gold, clearly demonstrating its nature as a macro-linked asset vulnerable to interest rate and inflation risks.

The key factors behind this sharp decline are attributed to government bond sell-offs and surging oil prices. A global storm of government bond sales pushed the 10-year U.S. Treasury yield to its highest level in years, increasing borrowing costs. Meanwhile, military tensions between the U.S. and Iran sent Brent crude above $92 per barrel, exacerbating inflation concerns. This significantly dampened expectations for an early interest rate cut by the U.S. Federal Reserve (Fed), and despite a robust inflow of $216.7 million into U.S. spot Bitcoin ETFs on September 1, it was insufficient to prevent a broader price correction across risk assets.

The breakdown of technical support levels and leverage liquidations also amplified the decline. As the crucial short-term support zone between $77,700 and $78,000 collapsed, selling pressure intensified, and the daily Relative Strength Index (RSI) cooled from above 70 to 66, signaling a slowdown in upward momentum after the powerful August rally. During this period, liquidations totaling $31.27 million occurred in the Bitcoin market alone over the past 24 hours, with long (buy) position liquidations accounting for the majority at $22.81 million, triggering a forced selling chain reaction.

The short-term market outlook hinges on whether the support level between $76,500 and $77,000, where large-scale liquidation volumes are concentrated, can be defended. Experts predict that if Bitcoin maintains this range, it could attempt to reclaim the 4-hour Bollinger Band midline at $78,260 and potentially rebound to $79,050. Conversely, if $76,500 breaks on a daily closing basis, there is a risk of further downside extending to the next major support at $75,700 and the vicinity of the 20-day Simple Moving Average (SMA) at $73,200.

Market experts diagnose that the decline is being driven by a readjustment of the macroeconomic environment rather than technical flaws. The future direction of the market is expected to be directly influenced by the U.S. August employment report, to be released on September 4, and inflation data on September 11. The key question is whether employment figures will show a slowdown, reviving interest rate cut expectations, or if the $77,000 mark will also collapse, leading to further correction towards $75,700.

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