Bitcoin dips below $108,000 as traders weigh macro signals entering September

Bitcoin, Ether, and other major cryptocurrencies declined over the weekend as traders processed macroeconomic data ahead of the Federal Open Market Committee (FOMC) meeting later this month.

According to The Block's crypto price page, bitcoin fell 0.71% to $107,866 as of 1:50 a.m. on Monday, currently in a price range that is the lowest since early July. Ether dropped 1% to $4,398, XRP fell 3.67% to $2.73, and Solana dipped 2.71% to $198.6.

"The crypto market extended its decline over the weekend following the PCE release, as persistently elevated inflation dampened expectations for a September rate cut," said Min Jung, research analyst at Presto Research.

Last Friday's Personal Consumption Expenditures data showed that core inflation rose 2.9% in July. While the rate came as expected, this was the highest annual rate since February, CNBC noted.

The inflation data intensified bearish market sentiment that initially followed a series of significant bitcoin whale sell-offs that triggered the liquidation of leveraged positions, Kronos Research CIO Vincent Liu told The Block.

"Bitcoin’s key psychological support sits at $100K, with leveraged positions under pressure, highlighting fragile liquidity," said Liu, adding that Ether's key support sits at $4,000. "If these supports break, it could trigger a deeper drop and a broader liquidity crunch, though a full bear market would require a more sustained decline."

NFP and FOMC

Traders are now focused on this week's non-farm payrolls (NFP) report, as it could signal the Federal Reserve's next move on interest rates based on the latest U.S. employment data.

"A major surprise in job growth could trigger sharp market moves—strong numbers may weigh on crypto as risk appetite falls, while weaker-than-expected data could lift demand," Liu said.

The FOMC meeting is scheduled for Sept. 16 and 17, which will bear the much-anticipated result of the U.S. central bank's interest rate decision.

Despite the recent PCE data pointing to sticky inflation, the CME Group's FedWatch Tool still gives a 87.6% chance of a 25 basis point rate cut in the upcoming meeting.