Bitcoin Struggles as Rising Yields and Strong Dollar Add Pressure

Bitcoin is facing renewed pressure, trading below $86,000 on Tuesday as profit-taking intensifies. The cryptocurrency has struggled to maintain its bullish momentum, with institutional and corporate demand showing mixed signals. While Strategy added 334 Bitcoin to its holdings, spot Bitcoin ETFs saw modest outflows of $89.90 million on Monday, marking the end of a brief inflow streak.

Rising US Treasury yields and a stronger dollar are adding to Bitcoin’s challenges. The 10-year Treasury yield climbed to nearly 5.35% on Monday before settling around 5.28%, making traditional fixed-income investments more appealing compared to riskier assets like Bitcoin. The US Dollar Index (DXY) also reached an intraday high of 102.53, further weighing on Bitcoin’s price.

Simon-Peter Massabni, head of business development at XS.com, noted that cryptocurrencies are benefiting from reduced expectations for an October interest rate hike and institutional buying. However, elevated yields, a strong dollar, and persistent inflationary pressures continue to dampen market sentiment. A sustained recovery would require broader bullish momentum across more crypto assets and stronger demand.

Profit-taking has reached its highest level this year, according to Santiment’s Network Realized Profit/Loss (NPL) indicator. The data showed a sharp increase on Monday, suggesting that Bitcoin holders are selling at significant profits, adding to the downward pressure on the cryptocurrency.