TLDR
- BTC declined 1.5% to $83,416 on Monday as rising bond yields triggered a shift away from risk assets.
- U.S. 10-year Treasury yields surged above 5%, reaching levels not seen since 2007.
- Escalating tensions between the U.S. and Iran added pressure after Trump dismissed Tehran’s ceasefire proposal.
- Probability of a Federal Reserve rate increase in October now stands at 70.3%, compared to 57.7% the previous week.
- Despite Monday’s retreat, Bitcoin has gained over 40% in Q3, marking its strongest third quarter since 2017.
Bitcoin experienced a 1.5% decline on Monday, sliding to $83,416 as market participants reduced exposure to riskier assets. The downturn came after a robust two-week rally fueled by anticipation of more favorable cryptocurrency regulations in the United States.
The selloff extended beyond Bitcoin alone. Major altcoins including Ethereum, Cardano, XRP, Dogecoin, and Solana all retraced portions of their recent upward movements.
Sovereign debt yields climbed substantially across developed markets. The benchmark 10-year U.S. Treasury yield broke through the 5% threshold for the first time since 2007, while Japanese government bond yields reached three-decade peaks.
Elevated yields enhance the appeal of government securities relative to higher-risk investments like cryptocurrencies. Both the Federal Reserve and Bank of Japan implemented rate increases in September and indicated additional tightening may be forthcoming.
Middle East Tensions Fuel Energy Price Concerns
Elevated crude oil costs linked to U.S.-Iran hostilities have contributed to inflationary pressures throughout the year. During the weekend, President Trump refused to dismiss the possibility of additional military operations against Iran following his rejection of Tehran’s proposed ceasefire agreement.
Crude oil markets reacted with prices climbing back near $95 per barrel, registering a 3% gain on Monday. Hamad Hussain, commodities economist at Capital Economics, informed Reuters that supply disruption fears continue to dominate even as tanker traffic through the Strait of Hormuz has shown improvement.
Ongoing clashes between Yemen’s Houthi militants and Saudi Arabia provided additional upward pressure on energy prices. Technical analyst Ali Charts commented on Bitcoin’s chart structure, noting that the cryptocurrency had completed a double bottom breakout and was now retesting the $82,000 neckline support, suggesting that maintaining this level could present an entry point before a potential rally toward $100,000.
Notwithstanding Monday’s setback, Bitcoin has surged more than 40% during the third quarter. This represents its most impressive Q3 performance since 2017, significantly exceeding the historical average quarterly gain of 8.6% recorded since 2013.
Bitcoin also registered its highest weekly closing price since late January at $84,450 before retreating to one-week lows around $82,557. Limited order book depth contributed to volatility, with approximately $30 million in sell orders concentrated near the $85,700 level on Monday.
Market Pricing Increases for October Rate Hike
Financial markets are now assigning a 70.3% probability to a 0.25% Federal Reserve rate increase in October, rising from 57.7% one week prior. The August PCE inflation data, the central bank’s preferred inflation metric, releases Wednesday with expectations for 3.6% year-over-year growth.
September’s employment report arrives on Friday. August’s payroll data significantly exceeded projections with 162,000 jobs added, while September forecasts anticipate 83,000 new positions.
Analyst Rekt Capital identified $82,500 as a critical support threshold for Bitcoin. He drew parallels to the 2022 bear market recovery cycle, when Bitcoin established a foundation above comparable support before launching its subsequent advance.
Rekt Capital stated that maintaining the $82,500 level would validate an inverse head-and-shoulders formation on the weekly timeframe. He cautioned that failure to defend this zone could push Bitcoin back into the $60,000 to $80,000 trading range.
Above current prices, the 2026 yearly opening level sits at $88,700, while the average entry price for spot Bitcoin ETF holders hovers near $86,000. On the downside, corporate Bitcoin treasuries hold an average cost basis around $80,500.
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