Crypto markets came under renewed pressure after stronger oil prices, robust U.S. economic data and a weak Treasury auction sent borrowing costs higher, with Dogecoin posting the largest loss among major tokens.
Bitcoin hovered around $83,900 during Thursday’s Asian trading session, down more than 2% over 24 hours after reaching almost $87,300, according to CoinDesk data. The 10-year Treasury yield climbed 15 basis points on Wednesday to finish at 5.11%, Treasury data showed.
Dogecoin dropped about 7% to just above $0.09, leading declines across major cryptocurrencies. Zcash, XRP and HYPE fell between 5% and 6%, while Ether, Solana and BNB each declined by 2% to 3%. TRX was little changed.
The pressure on markets began with oil, as Brent crude jumped more than 4% to nearly $104 per barrel. The move ended a six-day decline in oil prices that had been helping reduce concerns about inflation.
U.S. economic data added to the pressure. S&P Global’s preliminary survey showed business output expanding at its fastest pace in more than five years, with the composite purchasing managers’ index reaching 58.4, the highest level since July 2021.
The Treasury market then faced another test when the U.S. government sold $70 billion worth of five-year notes. Demand was relatively weak, with the auction producing a 5.033% yield, its highest since 2006. The yield was also around 3 basis points above the level at which the notes traded immediately before the auction, indicating that investors required additional compensation to buy the debt.
Rising Yields Weigh on Bitcoin
Higher Treasury yields can make non-interest-bearing assets such as bitcoin less attractive while increasing financing costs for leveraged traders. Bitcoin’s biggest move lower on Wednesday came shortly after the release of the U.S. business activity data.
Bitcoin has since remained below $85,000, a level that Ledn co-founder Mauricio Di Bartolomeo identified as a significant call-option strike ahead of Friday’s roughly $14 billion options expiry on Deribit.
