Bitcoin Price Rebound Tests Fed Hike Odds and Treasury Yields
Bitcoin's price has seen a rebound above $70,000 after dipping below $60,000 in late August.
However, this recovery is still well below the highs of last year, with the current price sitting at just 50% of its October 2025 peak above $126,000.
The immediate catalyst for this rebound is hotter-than-expected inflation data, which has pushed market-implied odds of a Federal Reserve rate hike to around 85%, according to Reuters.
This increase in interest rates poses a significant headwind for non-yielding, risk-sensitive assets like Bitcoin, as it raises the opportunity cost of holding them.
Despite this, some analysts believe that Bitcoin's structural demand picture is improving, with nearly $2 billion in inflows into Bitcoin ETFs in the week of August 17, reversing eight straight weeks of outflows through May and June.