Crypto Market Dips as Rate Hike Fears and Rising Yields Weigh on Assets

Major cryptocurrencies including Bitcoin, Ethereum, XRP, and Dogecoin experienced declines as rising US Treasury yields and expectations of another Federal Reserve rate hike reduced demand for risk assets. On September 28, Bitcoin traded around $82,930, down 1.2% over 24 hours, while Ethereum slipped 0.2% to $2,665. XRP dropped 2.3% to $1.48, and Dogecoin fell 3.6% to approximately $0.093. The broader crypto market capitalization remained near $2.96 trillion, with over $530 million in crypto positions liquidated.

The selling pressure continued as Bitcoin tested approximately $83,100 on September 29. CoinMarketCap reported that Dogecoin fell about 3%, XRP lost nearly 2%, while Ethereum remained comparatively flat. The US 10-year Treasury yield climbed to approximately 5.23% on September 28, its highest level since June 2007, increasing the appeal of higher-yielding traditional assets relative to risk assets like Bitcoin.

Markets priced a 71% probability of another 25-basis-point Federal Reserve increase in October, up from 64% a day earlier, according to the CME FedWatch Tool. Higher interest rates can pressure cryptocurrencies by increasing borrowing costs, strengthening yields available on traditional assets, and reducing financial liquidity. Altcoins like XRP and Dogecoin experienced larger declines due to their smaller market sizes and higher sensitivity to risk appetite.

By September 30, cryptocurrencies showed modest stabilization. Bitcoin traded around $83,500, Ethereum near $2,680, and XRP around $1.49. Expectations for an October hike also eased after New York Fed President John Williams indicated there was no urgency for another immediate increase. However, inflation, Treasury yields, oil prices, and upcoming US economic data remain important variables influencing crypto prices.