Crypto market update August 13: Bitcoin slips despite lower Fed hike odds, HYPE defies bearish sentiment

The crypto market is trading lower on August 13 as renewed geopolitical uncertainty weighs on risk assets, offsetting the positive impact of softer U.S. inflation data.

Bitcoin (BTC) has slipped below $64,000, while Ethereum (ETH) and most major altcoins are also in the red. Hyperliquid (HYPE) is the exception among the top 10 cryptocurrencies, gaining as traders react to reports of a possible U.S. expansion for its perpetual futures market.

The latest market weakness comes despite July U.S. inflation falling to 3.4%, which has reduced expectations for another Federal Reserve rate hike in September.

Why is the crypto market down today?

The main pressure on crypto markets today is renewed geopolitical uncertainty.

Iran reportedly said there has been no progress toward reviving a permanent ceasefire agreement, adding uncertainty for global risk assets. That development has overshadowed the more favorable macroeconomic signal from the latest U.S. inflation report.

July's U.S. inflation rate came in at 3.4%, helping reduce expectations for a September Federal Reserve rate hike. Prediction markets now put the probability of a September hike at around 33%.

Lower interest rates can generally make risk assets such as cryptocurrencies more attractive because investors have less incentive to hold cash and other lower-risk assets.

However, that potential tailwind has not been enough to lift the crypto market today. Bitcoin is down around 0.76%, trading near $63,575 at the time of writing, while Ethereum has fallen roughly 1.33% to $1,880.

According to the supplied market data, HYPE is the only top-10 cryptocurrency trading higher today.

Institutional demand has also remained weak. Bitcoin ETFs recorded approximately $61 million in outflows on August 12, while Ethereum ETFs recorded around $7.38 million in inflows. Other major altcoin ETFs reportedly saw no inflows.

Investors are also waiting for the latest U.S. initial jobless claims data. A stronger than expected labor market could reduce expectations for monetary easing and put additional pressure on risk assets.

Crypto market Data August 13

The numbers show that the broader market remains defensive. Bitcoin dominance is still above 58%, while the Fear & Greed Index sits at 29, indicating fear among investors.

The Altcoin Season Index is also at 46/100, suggesting that the market has not yet entered a broad altcoin-led phase.

Crypto liquidations reach $158 million

The derivatives market is adding to the volatility.

According to CoinGlass data in the source material, total crypto liquidations have reached around $158 million, consisting of approximately $84 million in long liquidations and $73 million in short liquidations.

Ethereum has recorded the largest amount of liquidations at around $26 million, while Bitcoin has seen approximately $1 million.

Open interest has also increased.

Total crypto open interest rose from roughly $114 billion on August 12 to $116 billion on August 13, while futures trading volume increased from $138 billion to approximately $143 billion.

The combination of higher open interest and falling prices suggests traders continue to maintain significant derivatives exposure despite the weaker spot market.

That can increase volatility if prices make a larger move in either direction and leveraged positions begin getting liquidated.

Bitcoin price outlook: short-term demand remains weak

Bitcoin's current weakness is also being linked to a decline in short-term holder supply.

CryptoQuant analyst Darkfost noted that investors who have held Bitcoin for less than one day now control only around 1.2% of BTC supply. Holders who have owned BTC for less than three months account for approximately 6.7% of supply.

A declining share of Bitcoin held by short-term investors can have an interesting long-term interpretation.

Short-term holders are generally more likely to react to immediate price movements. When BTC supply moves toward investors with longer holding periods, there may be less immediate selling pressure from traders reacting to small market declines.

That does not mean Bitcoin must rise in the short term, however.

The market still needs stronger demand to push BTC through the $65,000 resistance level highlighted in the supplied price analysis.

For now, Bitcoin remains below that level as traders wait for a stronger catalyst.

HYPE rises as Hyperliquid targets U.S. expansion

While most major cryptocurrencies are falling, Hyperliquid's HYPE token is moving in the opposite direction.

HYPE is up around 2.71% today, trading near $57 at the time of writing.

The move follows reports that Hyperliquid is looking to expand its perpetual futures market into the United States.

Perpetual futures are derivatives contracts that allow traders to speculate on the price of an asset without owning the underlying asset and without a traditional expiration date.

For Hyperliquid, expansion into the U.S. market could significantly increase its potential user base if regulatory requirements can be met.

The price action is also becoming technically interesting.

HYPE has reached the $56 resistance level of a double-bottom pattern. A sustained close above that level could strengthen the bullish setup and put the pattern's target near $62.

However, momentum has not yet confirmed the breakout.

The one-day Relative Strength Index (RSI) is around 50, indicating neutral momentum. For the bullish setup to gain strength, the RSI would need to move higher alongside the price.

That means traders will be watching both the $56 resistance level and momentum closely.

What happens next for Bitcoin and crypto?

The crypto market is currently caught between two opposing forces.

On one side, softer inflation has reduced expectations for a September Fed rate hike, which could eventually support risk assets. Bitcoin's declining short-term holder supply could also provide a more constructive long-term setup.

On the other side, geopolitical uncertainty, weak ETF demand and a still-cautious derivatives market are keeping buyers on the sidelines.

The next major catalyst is likely to come from U.S. economic data and Federal Reserve expectations. Today's initial jobless claims report could influence rate expectations if the labor-market data comes in significantly above or below forecasts.

Bitcoin's immediate technical level remains $65,000. A break above that resistance would provide a stronger signal that buyers are returning.

Meanwhile, HYPE has its own catalyst. A move above $56 could strengthen the double-bottom setup and open a path toward $62, although the neutral RSI means confirmation is still needed.

For now, the broader crypto market remains defensive, with Bitcoin struggling below $64,000 while HYPE is showing relative strength.

Related: The latest move comes after the previous session saw Ethereum and Dogecoin gain as U.S. inflation cooled, while Uniswap suffered a sharp decline.