On the Chain: Bitcoin holds near US$79,000 as rate fears temper crypto rally

Bitcoin remained pinned around US$79,000 on Tuesday as cryptocurrency markets absorbed stronger-than-expected US employment data and the prospect that interest rates could remain higher for longer.

The world's largest cryptocurrency was changing hands at roughly US$78,950, down around 1.4%, while Ethereum slipped about 1% to US$2,483. Solana was around US$103.60 after losing more than 2%, with XRP down a similar amount at about US$1.39.

The softer session follows a strong rebound through August, when Bitcoin gained around 24%, its best monthly performance since November 2024.

Rates return to centre stage

Crypto traders are again watching the Federal Reserve after the August US employment report showed payrolls rising by 162,000, substantially ahead of expectations.

The stronger labour market has increased uncertainty around the Fed's September meeting, with expectations for another rate increase rising following the data. Higher rates typically weigh on speculative assets by increasing returns available from government bonds and tightening financial conditions.

Despite that shift, Bitcoin has shown relative resilience around US$79,000.

US spot Bitcoin exchange-traded funds attracted around US$770 million across the first four trading sessions of September, providing a potential source of support as macroeconomic conditions become less favourable.