Bitcoin Hits Eight-Month High but Faces Resistance from Rising Treasury Yields
Bitcoin surged to an eight-month high of $87,397 on September 21, but its momentum was short-lived. The cryptocurrency retreated to around $84,700 by September 25, despite a 4.7% weekly gain.
The price spike required buyers to absorb significant selling pressure, with spot Bitcoin ETFs driving much of the buying activity. These funds attracted over $715 million in a single day and have seen a four-day influx of over $2.3 billion since August 19.
Short sellers also contributed to the price increase, as exchanges forced about $750 million in short positions to close when Bitcoin surpassed $86,000. However, not all ETF buyers are optimistic about Bitcoin's price trajectory, with some hedge funds purchasing shares while shorting Bitcoin futures.
The 10-year Treasury yield rose from around 5% to 5.1%, the highest level since 2007, which negatively impacted Bitcoin. The cryptocurrency must appreciate faster to remain an attractive investment, but current holders have remained steady and haven't rushed to sell.
With the third quarter ending on September 30, many funds rebalance at that time, which could keep Bitcoin below $87,397 through the end of the quarter. The window is narrowing for buyers with the 10-year yield at its highest since 2007 and funds rebalancing soon.