Selling Pressure Begins in Bitcoin and Cryptocurrencies
Bitcoin, which surged sharply on Monday, retreated due to record highs in US bond yields and Federal Reserve expectations.
Starting the week on a strong note, Bitcoin and other cryptocurrencies gave back some of their gains due to mounting global risks, record increases in US bond yields, and potential interest rate moves by the Fed.
Fluctuations in Bitcoin Price
Gaining about 7 percent on Monday to climb above $87,300, Bitcoin had seen its highest level since late January. However, this rise was short-lived, pulling back 1.7 percent on Wednesday to drop to $84,652.
US Economic Data and Fed Expectations
Strong economic data released in the US significantly reinforced expectations that the Federal Reserve could continue with interest rate hikes. According to S&P Global data, business activity accelerated for the fourth consecutive month in September, recording the strongest growth since July 2021.
While inflation indicators reached their highest level since October 2022, CME FedWatch data showed an increased probability of the Fed raising interest rates at its October meeting. Meanwhile, the US 10-year Treasury yield rose by 16.8 basis points to 5.116 percent, seeing its highest level since July 2007.
Oil Prices and Geopolitical Risks
Another major development affecting risk appetite in the crypto market was the upward movement in oil prices. Brent crude gained 4.3 percent to close at $103.50 per barrel.
Expectations that contacts between the US and Iran would not yield quick results, alongside statements by leaders at the United Nations General Assembly, brought geopolitical risks back to the forefront of market agendas.
Institutional Investments and ETF Inflows
Despite the pullbacks in prices, interest from institutional investors in spot Bitcoin ETFs continued. A total of $1.71 billion in capital flowed into these funds since the beginning of the week.
This capital inflow was recorded as the strongest weekly performance for the respective funds since late August.
Status of Other Cryptocurrencies
The downward movement in Bitcoin reflected broadly across other digital assets. Ethereum fell 2.2 percent to drop to $2,692, while XRP lost 4 percent of its value.
In the market, BNB dropped 2.4 percent, Solana 2.5 percent, and Cardano 5.3 percent. In the meme coin category, Dogecoin lost 7.3 percent and the TRUMP token declined by 11.1 percent.