Bitcoin Drops Below $85,000 as Treasury Yields Rise Above 5%

Bitcoin has retreated below the $85,000 mark after U.S. Treasury yields surged above 5%, influenced by robust economic indicators. The S&P Global’s flash U.S. Composite PMI rose to 58.4 in September, marking the highest reading since July 2021. This uptick in business activity has led to fears that the Federal Reserve may maintain a tight monetary policy, which could adversely affect risk assets like Bitcoin.

The recent climb of Bitcoin above $87,000 was fueled by positive sentiment and strong institutional demand, but the latest pullback towards the mid-$84,000 range highlights the cryptocurrency's sensitivity to macroeconomic conditions. While Bitcoin remains significantly above its earlier lows, the current market dynamics suggest that further buying pressure is needed to sustain higher price levels.

As Treasury yields rise, investors are presented with more attractive alternatives to riskier assets, making it crucial for Bitcoin to demonstrate resilience against macroeconomic headwinds. The ongoing economic data will play a pivotal role in determining how long interest rates will remain elevated, potentially impacting Bitcoin's trajectory through the remainder of 2026.