Bitcoin has fallen 3.2% to $75,702 after breaking below the $77,100 range floor for the third consecutive session, marking a significant decline from its recent consolidation zone. The cryptocurrency has spent the past 24 days stuck between roughly $76,000 and $81,300, with volatility falling to a one-month low as markets have increased the probability of a rate hike. A sustained move above $77,100 would strengthen the recovery case and bring the $78,000 area into view, while a break below the $76,043 low set after the August consumer price index report would weaken the current consolidation structure. Bitcoin remains the market's primary liquidity anchor, with its direction influencing how much attention and capital move into altcoins. Recent market reports from The Economic Times and finanzen.net citing the CME Group's FedWatch tool, indicate a rate hike is most recently priced in with a probability of around 92.5% after the producer price index for August rose by 5.4%. As per The Economic Times, elevated bond yields and macroeconomic uncertainty are weighing on sentiment, with traders expecting volatility to remain elevated around the Fed announcement.
Bitfinex has identified key support levels for Bitcoin's current decline, with the first support area between $74,985 and $75,412, combining Tuesday's low, Strategy's average Bitcoin purchase price, and a liquidation cluster previously located between $75,000 and $76,000. Strategy holds 845,050 BTC at an average cost of $75,412, according to the report. For the support zone to hold, Bitfinex said ETF flows would need to stabilize while open interest in September 18 options at the $75,000 strike remains contained. A sustained break below the area would expose the $73,500 cost basis of three-to-six-month holders, with Bitfinex identifying $71,300 as the short-term holder realized price. Below $73,500, the report identified $71,300 as the short-term holder realized price, which also sits near a $70,000-to-$71,500 volume node containing a cost-basis concentration of close to 350,000 BTC.
Despite futures traders rebuilding long positions, spot Bitcoin demand remains weak below $77,100. Coinbase's spot discount widened from 0.03% on Monday to 0.08% at the September 16 daily open, indicating weaker demand on the U.S. exchange than on other trading venues. The discount was its deepest since August 15, when Bitcoin traded below $65,000 before its subsequent advance. U.S. spot Bitcoin ETFs recorded $450.4 million in net outflows on Tuesday, with Fidelity's FBTC losing $214.8 million and BlackRock's IBIT recording $161.7 million in redemptions. Together, the two funds accounted for 84% of the daily total. The outflow ranked as the 33rd largest across the 687 trading sessions since U.S. spot Bitcoin ETFs launched in January 2024, and as the 14th-largest daily withdrawal of 2026. ETF demand had been stronger earlier in September, with the funds attracting $986.7 million in net inflows during the week ending September 4, led by approximately $691.5 million across BlackRock's Bitcoin products.
Bitcoin futures open interest recovered to $52.15 billion after falling by $1.7 billion during the decline, with derivatives traders quickly returning to the market despite weak U.S. spot demand. Open interest had stood at $52.1 billion before the breakdown, leaving total futures exposure slightly above its earlier level despite the price decline. At the same time, funding rates stayed positive without reaching levels that Bitfinex considered overheated. Traders continued adding long exposure while Bitcoin formed lower highs and lower lows. Aggregated cumulative volume delta showed an increase in buy-side taker activity after Bitcoin lost $77,000, with positive price moves accompanied by positive funding and rising open interest. About $571 million in long positions across crypto assets were liquidated on September 15, compared with approximately $100 million in shorts. Bitcoin and Ethereum each accounted for roughly $190 million of the long-liquidation total, with the event being the largest long liquidation since August 22.
Bitcoin's market structure continues to show signs of a potential shift as whale holdings decreased by 0.20% over three weeks while retail wallets increased their holdings by 0.09%, according to latest on-chain data from Santiment. This represents a notable change in holder behavior, with larger investors reducing their aggression while smaller investors take on more available supply. The divergence began around the late-August excitement that pushed Bitcoin above $80,000, with the 10-10,000 BTC cohort reducing their balances while retail holdings increased. The analysis shows that during periods of high expectation around central bank decisions, many market participants pull their offers out of the book, creating the most expensive execution conditions. As per CoinDCX Research Team, the overall market sentiment is currently greed, with the crypto fear index at 69.
Bitcoin's correlation with traditional assets has shifted significantly ahead of the Fed decision. Bitcoin's 10-day correlation with the S&P 500 rose to 0.76 from 0.20 on September 11, while its correlation with the Nasdaq 100 increased to 0.66 from 0.15. Over the same period, its correlation with gold fell from 0.79 to 0.51. From September 8 to September 15, Bitcoin fell 3.7% as the 10-year Treasury yield increased from 4.8% to 5%. The 10-year inflation-adjusted yield closed at 2.62%, raising the available return on U.S. government debt while Bitcoin continued trading as a non-yielding asset. The decline also accelerated as resting orders disappeared, with Bitcoin falling about $1,100 between 18:30 and 18:45 UTC on Tuesday despite almost no net taker flow on Bitfinex, suggesting buyers withdrew limit orders instead of sellers aggressively striking bids.
