Summary
- Bitcoin fell below $84,000 as stronger-than-expected U.S. economic data and a sharp rise in Treasury yields weighed on the market.
- Over the past 24 hours, the broader crypto market saw liquidations totaling $510 million, with losses from long positions alone reaching $363.83 million.
- As U.S. Treasury yields surged and expectations grew that the Fed would keep interest rates higher for longer, fresh capital inflows into the spot market may be key for Bitcoin to reclaim the $85,000 level.
Bitcoin fell below $84,000 as stronger-than-expected U.S. economic data and a sharp rise in Treasury yields hit the market.
U.S. economic data for September released on Sept. 23 beat market expectations, snapping Bitcoin's recent rally. As Treasury yields surged, leveraged long positions across the crypto market were liquidated in large numbers, widening the decline.
According to CoinGlass, $135.8 million in crypto positions were liquidated in the hour following the data release. Of that, $125.9 million came from long positions. Liquidations in Bitcoin and Ether totaled $47.4 million and $23.9 million, respectively.
Over the past 24 hours, total liquidations across the broader crypto market rose to $510 million. Some 122,256 traders were liquidated, with losses from long positions alone reaching $363.83 million.
Crypto outlet CryptoSlate said the stronger-than-expected U.S. data shocked markets. The flash reading for the S&P Global U.S. Composite Purchasing Managers' Index for September came in at 58.4, the highest in more than five years. The services and manufacturing PMI readings were 58.7 and 57, respectively, both above market expectations. Companies' input costs also rose at the fastest pace in four years, fueling inflation concerns.
The U.S. 10-year Treasury yield climbed above 5%, nearing its highest level since 2007, while the two-year yield touched its highest in about 27 months. Stronger economic growth and mounting price pressures reinforced the view that the Federal Reserve could keep interest rates higher for longer.
Bitcoin had earlier climbed to around $87,000 after breaking above $86,000, aided by the forced liquidation of short positions. This time, however, broad long liquidations sapped the rally's momentum. To regain the $85,000 level, Bitcoin will need fresh inflows into the spot market rather than temporary buying driven by short covering.
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