Bitcoin Drops 3.85% Amid Macro Headwinds and Elevated Volatility

Huo Xing Finance reports: On September 23, Bitcoin rose above $87,000 during the day, reaching its highest level since January, before retreating 3.85% and briefly dipping below $84,000. Although the cumulative gain over the past week still exceeded 10%, tonight’s pullback may indicate that the market is beginning to digest profit-taking and reassess liquidity pressures stemming from interest rates, oil prices, and the Middle East situation. Overheated sentiment is the first factor. According to data from Alternative.me, the Fear & Greed Index rose to 78 on September 22, re-entering the “extreme greed” zone for the first time in approximately 14 months. The earlier surge to $87,000 was also significantly fueled by structural capital flows. Inflows into U.S. spot Bitcoin ETFs rebounded, combined with short-covering rallies, jointly driving the price to break through key resistance levels. Forced liquidation of short positions can generate explosive buying pressure during rapid rallies, but as prices enter a high-range consolidation phase, their marginal upward momentum quickly fades, and the market then relies more heavily on genuine spot demand to absorb the upward movement. Macro pressures are simultaneously intensifying. Federal Reserve Governor Barr, amid the market’s decline, indicated that further rate hikes may be necessary to ensure a timely return to the 2% inflation target. The Fed finds itself in a difficult position but has already made adjustments in the right direction. Other Fed officials have also adopted hawkish stances recently. Boston Fed President Collins stated that persistent inflation and energy pressures triggered by Middle East conflicts are key reasons she supported the September rate hike and expects another possible hike before year-end. Chicago Fed President Goolsbee noted that under sustained supply shocks, bringing down inflation may require additional rate increases, which would impose economic pain. The market is now repricing the risk of “higher rates for longer.” Meanwhile, the Strait of Hormuz remains a core variable for inflation trades. In his speech tonight, Iranian President Pezeshkian stated that, under existing sanctions, the Strait of Hormuz must not be allowed to operate freely. Institutions generally agree that prolonged high oil prices will elevate energy inflation and constrain the Fed’s room for monetary easing. A scenario analysis by the Dallas Fed estimates that if the Strait of Hormuz were closed for a quarter, PCE inflation in Q4 2026 could rise an additional 1.09 percentage points. For Bitcoin, this would exert pressure through the dollar, real interest rates, and risk appetite. Amid multiple macro headwinds, the U.S. 10-year Treasury yield rose to 5.04%, hitting its highest level since 2007. The U.S. Dollar Index (DXY) climbed to 101—the highest since July 30—up 0.47% on the day.