Bitcoin Price Declines Below $85,000 Amid Rising US Treasury Yields

Bitcoin's price experienced a notable decline on September 23, slipping below $85,000 as U.S. Treasury yields rose sharply. The 10-year yield climbed above 5%, marking its highest level since 2007, which has historically pressured risk assets like Bitcoin.

After a week of gains driven by investor interest in exchange-traded funds, Bitcoin traded at approximately $84,357, down 2% over a 24-hour period. Earlier in the week, the cryptocurrency had surged to nearly $87,330, benefiting from a favorable market environment.

The downturn coincided with the U.S. Treasury's announcement of plans to purchase up to $6 billion in longer-term government debt, a move that typically supports bond prices but has not provided the same boost to Bitcoin this time. The increase in Treasury yields was further fueled by stronger-than-expected economic data, including a composite PMI reading of 58.4, indicating robust business activity.

As yields rise, the opportunity cost of holding non-yielding assets like Bitcoin increases, making it less attractive to investors. This dynamic has led to significant liquidations in the crypto market, with over $510 million lost across various positions, primarily affecting long traders.

The recent economic indicators suggest that inflation pressures are mounting, with companies reporting the highest input costs since October 2022. This environment complicates the outlook for Bitcoin, as rising yields and inflation fears continue to create headwinds for the cryptocurrency market.