Bitcoin and most major cryptocurrencies traded lower on Tuesday, as surging U.S. Treasury yields, oil prices above $100 and mounting expectations for a Federal Reserve interest rate hike weakened demand for risk assets.
Bitcoin fell below $77,000, trading at $76,947.63 at around 09:16 GMT, according to the latest market snapshot. The world’s largest cryptocurrency was down. 0.86 percent over 24 hours and 2.03 percent over seven days, with a market capitalization of about $1.54 trillion and 24-hour trading volume of $29.30 billion.
Earlier Tuesday, Bitcoin down 2.30 percent at $77,288 as pressure spread across global risk assets.
Crypto market weakens
The broader cryptocurrency market remained under pressure, although sentiment indicators suggested investors had not moved into outright fear.
The CoinMarketCap market dashboard showed the total cryptocurrency market capitalization at around $2.66 trillion, with 24-hour trading volume at approximately $83.27 billion.
Bitcoin accounted for 58.8 percent of total cryptocurrency market capitalization, while Ethereum’s dominance stood at 11.5 percent. CoinMarketCap’s Fear & Greed reading was 69 out of 100, remaining in greed territory, while its Altcoin Season Index stood at 37 out of 100, signaling that the market remained firmly in “Bitcoin Season.”
Ether traded at $2,473.11, down 1.98 percent over 24 hours, although its seven-day decline was limited to 0.11 percent.
BNB fell 1.26 percent to $716.30 and was down 5.70 percent over the week.
Solana slipped 1.22 percent to $100.278, extending its seven-day decline to 2.33 percent, while TRON fell 0.49 percent to $0.337771 and was down 0.21 percent over seven days.
XRP bucked the broader decline, rising 0.20 percent to $1.3878 and posting a 0.26 percent weekly gain.
Stellar performed even more strongly, climbing 3.55 percent to $0.19141, leaving it 0.98 percent higher over seven days.
Altcoins face pressure
Losses were sharper across several large-cap altcoins.
Dogecoin dropped 2.09 percent to $0.082450, taking its seven-day decline to 7.43 percent, while Cardano fell 3.07 percent to $0.2042 and was down 5.90 percent for the week.
Chainlink slipped 0.34 percent to $11.376, but remained 10.20 percent lower over seven days.
Bitcoin Cash traded 0.77 percent lower at $220.95, extending its weekly loss to 13.83 percent, while Litecoin dropped 2.50 percent to $52.53 and was down 4.60 percent over the week.
Sui declined 2.19 percent to $0.7086, leaving it 13.29 percent lower over seven days.
Shiba Inu fell 1.79 percent to $0.00000535 and was down 4.55 percent for the week.
Some tokens resisted the decline.
Uniswap climbed 3.96 percent to $6.5980, although it remained 6.34 percent lower over seven days.
Avalanche gained 0.99 percent to $7.49, but was down 7.27 percent for the week.
NEAR Protocol fell 1.90 percent to $2.3807, while retaining a 2.75 percent seven-day gain.
Monero rose 0.44 percent to $517.089, while Zcash eased 0.14 percent to $1,138.86.
Hyperliquid fell 1.40 percent to $78.6910, extending its weekly decline to 6.47 percent.
Major stablecoins remained close to their dollar pegs, with Tether at $0.9997, USD Coin at $1.0003 and Dai at $0.99982.
Treasury yields top 5 percent
Macroeconomic conditions remained the dominant source of pressure on the crypto market.
The benchmark U.S. 10-year Treasury yield climbed above 5 percent, reaching its highest level since 2007 as rising energy prices and expectations for tighter monetary policy drove a broader global bond selloff.
A Reuters market update put the yield at around 5.03 percent as oil prices near $108 reinforced inflation concerns.
Higher Treasury yields increase competition for investor capital, particularly against volatile risk assets such as cryptocurrencies, by offering higher returns on government debt.
Bitcoin has therefore become increasingly sensitive to changes in bond yields as markets reassess the likely path of U.S. monetary policy.
Fed decision looms
Expectations for a Federal Reserve rate increase strengthened further ahead of Wednesday’s decision.
The Federal Reserve’s official calendar confirms that policymakers began their two-day meeting on September 15, with the policy statement scheduled for Wednesday.
A Reuters poll found 86 of 101 economists expect a 25-basis-point increase, which would lift the federal funds target range to 3.75 percent to 4.00 percent.
The expected move would represent the Fed’s first rate increase since July 2023.
Market expectations shifted rapidly as hotter inflation data, higher oil prices and resilient economic activity strengthened the case for further tightening.
CME’s FedWatch tool showed traders assigning roughly a 93 percent probability to an increase during Tuesday’s session, with the precise probability fluctuating as Treasury and energy markets moved.
Investors will also scrutinize Chair Kevin Warsh’s comments for indications of whether Wednesday’s expected increase is likely to be a one-off adjustment or the beginning of a broader tightening cycle.
Bitcoin options remain bullish
Despite the near-term pressure, longer-term Bitcoin derivatives positioning has become more optimistic.
Bitcoin options market had turned bullish for the first time in 12 months after the cryptocurrency rebounded from two-year lows around $60,000 in late August.
Open interest for the December 25 expiry was concentrated at the $80,000 strike, with about $710 million in notional value, and at the $100,000 strike, with roughly $530 million.
The positioning indicates that some investors are betting Bitcoin could return to $80,000 or higher by the end of the year despite current macroeconomic headwinds.
Bitcoin exchange-traded funds have also shown signs of renewed demand.
ETF inflows reached nearly $2 billion during the week of August 17, following eight consecutive weeks of outflows in May and June, according to Reuters.
The flows suggest institutional demand has begun recovering even as high bond yields and tighter monetary conditions create near-term pressure.
Cry. to bill watched
Investors are also monitoring a potentially important U.S. regulatory catalyst.
The Senate is due to hold a procedural vote Tuesday on the Digital Asset Market Clarity Act, legislation intended to establish a clearer regulatory framework for cryptocurrencies.
The bill seeks to address longstanding uncertainty over which digital assets should be regulated as securities and which should be treated as commodities, an issue the cryptocurrency industry has argued has constrained investment and adoption.
A revised version incorporated 126 substantive changes requested by Democrats, including changes addressing ethics and financial-stability concerns.
Uncertainty remains over whether supporters can secure the 60 votes required to advance the legislation in Tuesday’s procedural vote.
The revised legislation also includes stronger restrictions on public officials profiting from their own cryptocurrency ventures and gives state attorneys general greater enforcement powers.
Banking-industry concerns remain, particularly over provisions allowing cryptocurrency companies to offer rewards on stablecoins, which banks have warned could increase competition for deposits.
The Senate Banking Committee previously advanced the CLARITY Act by a 15-9 bipartisan vote, sending the legislation to the Senate floor.
An unexpected breakthrough on the bill could provide a positive catalyst for cryptocurrencies.
