Bitcoin fell below $84,000 during Asian trading on Thursday, dropping to around $83,200 as the US 10-year Treasury yield climbed to its highest level since 2007.
The 10-year Treasury yield closed at 5.11% on Wednesday, up from 4.96% a day earlier, and reached 5.13% during the session. Stronger US business data and rising oil prices contributed to the bond market sell-off, increasing pressure on risk-sensitive assets such as Bitcoin.
Rising Treasury yields can make government bonds more attractive to investors while increasing borrowing costs, potentially weighing on Bitcoin and other risk assets. Market analyst James Stanley identified $82,833 as an important level to watch if Bitcoin’s decline continues.
Expectations of further Federal Reserve tightening have also increased. Market analysis indicated that traders were assigning around a 70% probability to a rate hike in October, while CME FedWatch data showed the probability at about 75% for an increase to the 4.00%-4.25% range.
The US Treasury has also announced a buyback of up to $6 billion in long-dated bonds as part of efforts to improve liquidity in the market. The move comes as Treasury yields remain elevated and investors assess the outlook for US interest rates.
Despite the latest decline, Bitcoin remains higher in September, having gained around 7.35% so far this month. Historical data also shows October has generally been a stronger month for Bitcoin, although the cryptocurrency declined 3.69% in October last year.
