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Bitcoin and the bond market were watched side by side

In the cryptocurrency market, Bitcoin rose more than $84,000 around the Wall Street open on Thursday, gaining 0.6% on the day. According to TradingView data, the BTC/USD pair continued to post higher lows on the hourly chart, a sign that the short-term recovery attempt remained intact.

The move was driven in part by a pullback in the U.S. bond market. The U.S. 10-year Treasury yield climbed as high as 5.342% during the day, reaching levels not seen since April 2002, before easing to 5.251% at the time of writing. The 30-year Treasury yield also tested multi-year highs.

What is driving the bond sell-off, and why was inflation data not enough?

One of the main reasons behind the market pressure was rising public debt and expectations that it would push governments' borrowing costs higher. Mahmood Pradhan, a former deputy head of the IMF's European department, told The New York Times that the war in the Middle East had again clouded the inflation outlook through higher oil prices.

In the U.S., the PCE inflation measure closely tracked by the Fed came in at 3.4% year-on-year in August, below expectations. Even so, markets did not see a meaningful sense of relief; analysts attributed much of the softer reading to changes in the calculation method. Crypto analyst Benjamin Cowen also linked the sharp rise in Treasury yields to investor concerns that the Fed may not be sufficiently committed to fighting inflation.

Price levels traders are watching

  • According to order book data, $84,500 was watched as the first major liquidity area on the upside.
  • $82,900 stood out as the main zone that could draw price lower during downswings.

Liquidations stayed limited as eyes turn to $82,500 support

According to CoinGlass data, a total of $25 million worth of positions were liquidated over the past 24 hours. Long and short positions building up near current levels helped keep price range-bound rather than triggering a sharp breakout.

Trader and analyst Rekt Capital said the current technical setup could pull Bitcoin back toward its key support near $82,500. In the analyst's view, a successful retest of that level could pave the way for the next attempt higher, while losing support could weaken hopes for a broader recovery.

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