Bitcoin Rally Cut Short by Stronger US Business Activity
Bitcoin's rally was cut short on Wednesday after a stronger-than-expected US business activity report sent Treasury yields higher, causing the cryptocurrency to drop below $84,000.
The S&P Global flash Purchasing Managers' Index (PMI) showed that US business activity rose to 58.4 in September, the fastest growth since July 2021, while input costs jumped at their fastest pace since October 2022.
Chris Williamson, chief business economist at S&P Global Market Intelligence, noted that 'Firms' input costs have meanwhile jumped in September at the steepest rate for four years...'
The rise in Treasury yields made assets without interest-bearing potential, such as Bitcoin, less attractive. The 10-year US Treasury yield climbed to 5.058%, up from 4.96% on Tuesday.
Despite a 13% price move over the past four days, implied volatility remained around 35%. The upcoming $14 billion Bitcoin options expiry on Friday is drawing attention, with roughly $844 million in short positions liquidated over 24 hours during the move.