Global stocks fell to a one-week low as Brent crude climbed for a second consecutive session and traders increased bets on additional Federal Reserve rate hikes ahead of Wednesday’s PCE inflation report.
Bitcoin slipped less than 1% to just above $83,100 during Asian trading hours on Tuesday, returning to the lower end of last week’s range. The move came after the 10-year Treasury yield reached its highest level since 2007.
Zcash’s ZEC posted the largest decline among major cryptocurrencies, falling 12% to around $1,380, according to CoinDesk data. Solana’s SOL and HYPE each declined between 3% and 4%, while DOGE dropped 3%, BNB lost 2% and XRP fell nearly 2%. Ether and TRX were little changed.
Among smaller cryptocurrencies, The Graph’s GRT gained 18% and Immutable’s IMX rose almost 10%, according to FxPro. UNI and BCH each declined about 10%, while DASH fell 7%. The overall cryptocurrency market capitalization stood near $2.86 trillion.
A closely followed crypto sentiment gauge registered 74 out of 100 on Monday, just below the threshold for “extreme greed.” FxPro noted the contrast with broader equity markets, where investor sentiment has remained in fear territory for roughly 20 consecutive days.
“Bitcoin has pulled back to $83K, testing the lower boundary of last week’s consolidation range,” Alex Kuptsikevich, chief market analyst at FxPro, said in an email to CoinDesk. He said a move back toward the $82,000 area would be consistent with current market conditions, noting that the level marked peaks in May and early September.
Kuptsikevich added that a sustained move below $80,000 would signal that the market may need more time before attempting another advance. However, if the current consolidation is followed by renewed bullish momentum, Bitcoin could potentially move well above $90,000.
Bonds and Oil Weigh on Bitcoin
The latest pressure on cryptocurrencies is coming largely from the bond and energy markets.
Treasuries stabilized during Asian trading after falling sharply in U.S. markets. The 10-year Treasury yield increased by one basis point to 5.25%, following its highest level since 2007 on Monday. Rising government bond yields increase the relative appeal of income-generating assets compared with assets such as Bitcoin, which do not provide a conventional yield.
Brent crude advanced more than 1% to nearly $107 per barrel, marking its second consecutive daily gain as expectations for an immediate diplomatic breakthrough with Iran weakened.
Higher oil prices can add to inflationary pressure, prompting traders to increase expectations for further Federal Reserve rate hikes. The MSCI All Country World Index fell to its lowest level since Sept. 18, while Nasdaq 100 futures declined 0.3% following Monday’s technology-led selloff on Wall Street.
PCE Inflation Data in Focus
The next major inflation reading is due Wednesday, when the U.S. Commerce Department releases the August personal consumption expenditures price index.
The PCE index is closely watched by the Federal Reserve as a measure of inflation. A hotter-than-expected reading could reinforce expectations for additional rate increases and push Treasury yields even higher.
That combination of rising yields and renewed inflation concerns is adding pressure to Bitcoin after its recent move above $87,000.
About The Author
More Stories
Aave Leads DeFi Recovery as Crypto Absorbs Rising Bond Yields
Bitcoin Holds Near $84K as Consumer Confidence Drops Sharply
Bitcoin Set to Break Decade-Long September Trend as Gains Accelerate