Bitcoin Drops Below $85,000 as Surging Treasury Yields, Oil Prices Spook Markets

Bitcoin fell on Thursday, extending overnight losses as a surge in U.S. Treasury yields and oil prices dampened investor appetite for risk assets. The downturn reflects broader market concerns over the prospect of higher-for-longer interest rates.

Macro Headwinds Pressure Crypto

The world's largest cryptocurrency by market capitalization, Bitcoin (BTC), fell 2.7% to $84,148.7 by 02:14 ET, according to data from Investing.com. The decline was part of a broader market retreat from risk-driven assets after the benchmark U.S. 10-year Treasury yield climbed above 5% to its highest level since 2007.

Higher yields on safe-haven assets like government bonds typically reduce the appeal of more speculative investments such as cryptocurrencies. They offer investors a more attractive, lower-risk return, which can pull capital away from volatile markets like digital assets.

Hawkish Fed and Oil Spike Add to Concerns

The spike in Treasury yields was fueled by robust U.S. purchasing managers index data and hawkish commentary from a Federal Reserve official, which increased market expectations for further interest rate hikes. This follows the U.S. central bank's decision to raise rates by 25 basis points last week while reiterating its commitment to a 2% inflation target.

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Adding to inflationary pressures, oil prices rebounded amid what the source described as overstated bets on U.S.-Iran diplomacy. The rebound was reportedly fueled by a speech from Iranian President Masoud Pezeshkian at the United Nations.

Altcoins Follow Bitcoin Lower

The negative sentiment spread across the digital asset market, triggering a broad sell-off and profit-taking after a strong performance for the sector through September. Major alternative cryptocurrencies, or altcoins, also posted significant declines.

Key altcoin movements included:

• Ether (ETH), the second-largest cryptocurrency, fell 2.5% to $2,685.83.
• XRP dropped a sharp 7.5% to $1.5052.
• Cardano (ADA) and Dogecoin (DOGE) slid 7.1% and 7.7%, respectively.