Bitcoin Tumbles Below $84K as Strong US Economy Fuels Rising Treasury Yields
Bitcoin's recent rally has come to an end as prices slipped below $84,000. The sudden drop occurred on Wednesday, but it's unclear if the US Purchasing Managers' Index (PMI) report had a direct impact.
The PMI reading of 58.4 in September is the strongest since July 2021, indicating a brisk pace of economic growth. A strong economy can be good for businesses, but may not bode well for investors hoping for easier monetary policy from the Federal Reserve.
On Wednesday, the 10-year Treasury yield rose above 5%, increasing the return on government debt and potentially weighing on assets like Bitcoin. However, it's essential to note that the PMI report is just one factor influencing the market, and other traders may have taken profits after Bitcoin's rapid climb.
US spot Bitcoin ETFs had seen strong demand before the price drop, with $714.7 million flowing in on Tuesday, following $999 million on Monday. This influx of capital doesn't necessarily require an immediate rise in Bitcoin prices, but it does create a fresh test for the rally's sustainability as Treasury yields continue to rise.