Bitcoin Nears US$ 87,000 as Fed Rate Hike Expectations Fade
The price of Bitcoin (BTC) approached US$ 87,000 on Monday, October 5, driven by a significant reduction in expectations of a Federal Reserve interest rate hike in October. However, the cryptocurrency later gave back some gains, settling near US$ 86,000.
At the time of writing, Bitcoin is up 1% over 24 hours, trading at US$ 86,094. In Brazil, it reached R$ 443,225, according to Portal do Bitcoin. Other major cryptocurrencies saw mixed movements: Ethereum (ETH) rose 0.6% to US$ 2,719, XRP climbed 1%, while Solana and BNB each fell 0.3%.
Bitcoin's peak during the early morning hours reached approximately US$ 86,950, just US$ 500 short of its eight-month high of US$ 87,400 recorded at the end of September. However, sellers reemerged, pushing the price back by around US$ 1,000. This marks the second time in less than a week that Bitcoin has attempted, and failed, to sustain gains above US$ 86,000.
The latest surge was fueled by weaker-than-expected U.S. labor market data, with only 29,000 new jobs added in September, far below forecasts. The unemployment rate also rose to 4.2%, reducing pressure on the Fed to raise rates in October. The market now assigns only an 18% probability to such a move, down from 64% a week earlier.
While reduced rate hike expectations have boosted risk assets, including U.S. tech stocks, Bitcoin's progress remains constrained by high Treasury yields. The 10-year Treasury yield dropped slightly to 5.25% but remains near multi-decade highs, making government bonds more attractive compared to non-yielding assets like Bitcoin. Additionally, a stronger U.S. dollar adds further resistance.
Analysts now watch the US$ 87,000 level closely. A daily close above this mark would signal stronger buying momentum. However, the recent pullback suggests that resistance remains strong. The next move in Bitcoin will likely depend on Treasury yields and upcoming U.S. inflation data.