Bitcoin's Institutional Bids vs. Rising Rates: A Tug-of-War for Price
Bitcoin is caught in a tug-of-war between two powerful forces: rising interest rates and strong institutional demand. The bond market's influence was evident on Wednesday, when the US purchasing managers' survey drove the 10-year Treasury yield to its highest level since July 2007.
The surge in yields led to a 2.3% drop in Bitcoin, with prices falling from $86,195 to $84,255 by 10:35am ET. However, this decline was not due to forced selling or panic, but rather rate repricing.
Despite the short-term pain, institutional demand remains strong. Spot ETFs have absorbed over $2.3 billion in just four sessions, with no net outflows on Tuesday. The average cost basis of spot ETF holders sits at $81,722 per BTC, and they will likely defend this level due to fresh gains after eight months underwater.
Looking ahead, the thesis for Bitcoin's forecast is straightforward: as long as ETF inflows remain above $400 million a day, prices should hold between $81,722 and $82,000, allowing another run at the $87,251 high. If yields continue to climb and ETF flows turn negative, $80,000 could come into play.