Key facts
- Bitcoin was trading around $84,000 on Tuesday, up 0.9% over 24 hours.
- Spot Bitcoin ETFs have recorded eight consecutive days of inflows, totaling approximately $3 billion.
- The 10-year Treasury yield reached 5.274% on Monday, its highest point since June 2007.
- Brent crude oil prices fell below $104 on Tuesday after exceeding $108 on Monday.
- Futures markets price the probability of an October Federal Reserve rate hike at 70.3%.
Bitcoin traded around $84,000 on Tuesday, showing a modest 0.9% gain over 24 hours but a 2% decline for the week, according to CoinGecko data. The cryptocurrency has maintained this price range for two weeks amidst broader market pressures.
Treasury yields are near multi-year highs, largely driven by oil prices. The 10-year Treasury yield hit 5.274% on Monday, its highest level since June 2007, while the 30-year yield reached 5.583%, a level not seen since 2002. Both yields saw slight decreases on Tuesday as crude oil prices retreated. Brent crude had surpassed $100 a barrel on Monday following President Donald Trump's rejection of Iran's proposal to end the war and reopen the Strait of Hormuz, which also boosted the dollar. However, Brent fell by approximately 1.7% to below $104 on Tuesday as US and Iranian officials engaged in indirect talks and Saudi Arabia partially restored flows through its East-West pipeline, offering an alternative to the Strait of Hormuz. Gold prices have fallen to a seven-week low.
Analysts suggest that the rise in crude prices is pressuring non-yielding assets like Bitcoin, leading to a pause in its rally. "The rise in crude prices is capping non-yielding assets, so Bitcoin's rally has taken a bit of a pause," said Kyle Rodda, senior financial market analyst at Capital.com, who anticipates Bitcoin will struggle to gain upward momentum while energy risks persist, though he views the current price action as consolidation within a short-term uptrend.
Despite the challenging macroeconomic environment and the Senate's failure to advance the Clarity Act, Bitcoin has shown resilience, holding between $82,000 and $84,000 for over a week, according to Thahbib Rahman, research analyst at Block Scholes. This stability is attributed to institutional demand.
Spot Bitcoin ETFs have experienced inflows for eight consecutive sessions, accumulating roughly $3 billion, according to Farside Investors data. On Monday, net inflows were $31.07 million, with BlackRock's IBIT receiving $54.84 million and Grayscale's mini trust adding $10.32 million, partially offset by outflows from Grayscale's GBTC ($23.19 million) and Fidelity's FBTC ($10.90 million). These funds now hold $107.82 billion in assets, representing 6.42% of Bitcoin's market capitalization.
Options traders are hedging their positions, with the 25-delta put-call skew for seven to 30-day tenors nearing neutral, indicating a mix of downside protection buying and rally positioning.
Bitcoin treasury firm Strategy disclosed the purchase of 1,665 BTC for approximately $142.7 million between September 21 and 27, increasing its holdings to 847,666 BTC, surpassing its previous record of 847,363 BTC held in June.
Upcoming US economic data, including Wednesday's August core PCE and second-quarter GDP estimate, along with Friday's September jobs report, are expected to influence the Federal Reserve's policy decisions. The September jobs report is forecast to show payroll growth of around 90,000, down from August's 162,000, with unemployment holding at 4.1%. Barclays chief U.S. economist Marc Giannoni anticipates September payroll growth closer to 50,000. Futures markets indicate a 70.3% chance of a quarter-point rate increase at the Fed's meeting on October 27 and 28, up from 55.4% a week ago.