Bitcoin dropped below $78,000 on Tuesday for the first time since Sept. 3 as Middle East tensions pushed oil prices to multi-month highs and dragged down US stocks. An analyst warns Bitcoin must hold $78,300 in support or risk repeating May's breakdown to macro lows.
Bitcoin (BTC) fell as low as $77,600 at Tuesday's Wall Street open, its lowest level since Sept. 3, as renewed Middle East tensions pulled down risk assets across markets.
Middle East Tensions Push Oil to Multi-Month Highs
News of Houthi strikes on Saudi Arabian cities and oil infrastructure pressured US stocks at the open of the first trading session after the Labor Day holiday. The S&P 500 fell 0.5% and the Nasdaq Composite dropped 0.4% at the time of writing.
Oil reacted more sharply. WTI crude surged toward $95 a barrel, its highest since June 8, while Brent crude targeted the $100 mark for the first time since July 24. Trading resource The Kobeissi Letter said inflation expectations continue to mount as a result of a record rise in US diesel prices. Cointelegraph noted the next CPI print is due Friday.
In a Truth Social post, President Trump downplayed the oil price surge, pledging that prices would eventually fall below $2 a gallon once the war with Iran ends.
Analyst Flags Repeat of May's Failed Breakout
Trader and analyst Rekt Capital compared the current pullback to Bitcoin's failed May breakout, when BTC/USD reached $82,800 before reversing, consolidating at $78,300 and eventually dropping to macro lows near $57,000. According to Rekt Capital: "The retest of ~$78300 is now in progress".
Should the $78,300 support zone fail to hold, BTC/USD would seal another lower high in a series stretching back to October 2025, keeping its 2026 bear market in place. Rekt Capital said a weekly close below $78,300 followed by a bearish retest similar to May's pattern would likely confirm a breakdown.
ETF Inflows Persist Through the Pullback
Before the latest drop, Bitcoin had consolidated between roughly $78,700 and $80,500 since peaking near $82,200 on Sept. 3, when stronger-than-expected US jobs data reshaped Federal Reserve rate expectations. Spot bitcoin ETFs drew nearly $1 billion last week, extending three-week inflows to about $3.8 billion.
Sources: Cointelegraph.com News, Bitcoin News
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