Bitcoin rose slightly on Monday to $83,327, up 0.6% over the past 24 hours, according to CoinGecko data. The asset is still down 2.9% over the past week.
Capital.com Senior Market Analyst Daniela Hathorn told Decrypt that Bitcoin is "struggling against an increasingly challenging macroeconomic backdrop."
She said: "Rising energy prices have reignited inflation concerns, pushing U.S. Treasury yields higher and strengthening the dollar as investors reassess the Federal Reserve’s interest rate path. Although Bitcoin is viewed as a potential alternative store of value, recent price movements suggest that investors still primarily treat Bitcoin as a risk asset rather than a reliable geopolitical hedge."
According to CME FedWatch, traders assign a 19.4% probability to a 25-basis-point rate hike at the Fed’s October 28 meeting, down from 22.1% a week ago and 42.5% a month ago. Prediction markets Polymarket and Myriad both place the probability at 17%. (Disclaimer: Myriad is a prediction market developed by Dastan, the parent company of Decrypt.)
Jade Shi of Bitfire said that changes in interest rate expectations should theoretically support Bitcoin, but persistently high long-term U.S. Treasury yields indicate that the broader financial environment has not truly eased. She added that this also explains why Bitcoin, despite showing resilience, has not yet clearly broken through resistance levels.
According to CNBC, the 10-year U.S. Treasury yield is at 5.24%, and the 30-year yield is at 5.60%, after reaching 5.37% and 5.73%, respectively, last week—their 52-week highs. James Butterfill, Head of Research at CoinShares, wrote on Thursday that these yields have risen to their highest levels in over two decades.
Butterfill believes that if these yields increasingly reflect concerns about U.S. public finances rather than stronger growth, Bitcoin will begin to "look less like a traditional risk asset and more like an alternative to government-issued currency."
SoSoValue data shows that U.S. spot Bitcoin ETFs recorded a net inflow of $21.13 million last Friday, following net outflows of $487.07 million on Wednesday and $244.13 million on Thursday.
From a technical perspective, Bitfire notes that Bitcoin is primarily trading between approximately $80,300 and $87,100. A breakout above $85,600 with stronger volume could open the path upward to $87,395; a break below $82,000 may expose it to a potential decline toward $79,000.
Hathorn said: "Recent de-escalation in Middle East tensions has provided some breathing room, but whether the rebound can sustain will depend on whether improved market sentiment translates into more pronounced declines in bond yields and the dollar. The market is now focused on the upcoming U.S. inflation data, which could play a decisive role in shaping expectations for the Fed’s next move."