Rising Yields and Rate-Hike Fears Cast Bearish Shadow on Crypto Q4

The crypto market is bracing for a potentially bearish fourth quarter, as rising yields and rate-hike fears take center stage. The Federal Reserve's recent 25 bps hike has sent shockwaves through the financial markets, with the U.S. 2-year Treasury yield climbing to its highest level in 26 months at 4.734%. A move above the 6% threshold next year is not out of the question, according to analysis from the Kobeissi Letter.

The stronger dollar and rising yields are putting pressure on liquidity, which could further reduce demand for risk assets like crypto. Meanwhile, Bitcoin's Open Interest has jumped by approximately 10k following the FOMC announcement, indicating fresh speculative capital entering the market. However, with leverage beginning to pick up and the macro FUD prevailing, a breakdown below Bitcoin's key near-term support level of $70k cannot be ruled out.

According to Glassnode's data, if BTC breaks below this level, short-term holder cost basis could trigger selling pressure, increasing the risk of liquidations. The broader market setup is tilting more on the bearish side for now, with rising yields and rate-hike fears taking center stage.