Bitcoin slipped back into negative territory on Tuesday after rallying above $79,000 the prior day, trading below $77,000 and down more than 1% over the past 24 hours. The pullback comes as traders weigh near-term pressure from higher US bond yields, firmer oil prices, and expectations for tightening by both the US Federal Reserve and Japan’s central bank.
Key takeaways
- Price move: Bitcoin fell to below $77,000, after breaking above $79,000 on Monday.
- Catalyst: Investors appear to be responding to a mix of rising Treasury yields, higher energy prices, and growing odds of policy tightening in the US and Japan.
- Technical implication: Chart signals point to weakening bullish momentum, with downside scenarios focused around the $70,000–$71,000 area.
- What to watch: The direction of US yields and the outcome of the Fed’s Wednesday decision could be pivotal for risk appetite in crypto.
What drove the move
One key driver is the bond market. According to CNBC’s market data, the benchmark 10-year Treasury yield moved above 5.02% on Tuesday, reaching its highest level since mid-2007. Higher yields can be a headwind for Bitcoin because they raise the opportunity cost of holding non-yielding assets. As safer alternatives become more attractive, investors may demand higher expected returns to justify exposure to volatile markets.
Rising yields also tend to tighten financial conditions by increasing borrowing costs and strengthening the US dollar. That dynamic can reduce liquidity available for speculative risk, which is typically a key support for high-beta assets like cryptocurrencies.
Energy prices are adding a second layer of pressure. Brent crude traded around $107.37 per barrel and West Texas Intermediate held above $103 on Tuesday, after gains were fueled by attacks on Saudi infrastructure that revived concerns about supply disruptions. The report also pointed to disruptions to Saudi Arabia’s East-West pipeline, which can redirect roughly 4% of global oil supplies away from the Strait of Hormuz.
If oil remains elevated, it can feed into broader inflation concerns through transportation, manufacturing, and consumer costs—an outcome that would reinforce the case for tighter monetary policy.
The third driver is monetary policy expectations. Markets are pricing about a 90% probability of a 25 basis point rate increase by the Federal Reserve on Wednesday, which would be the Fed’s first hike since mid-2023. A Reuters survey cited by the original reporting found that 85% of economists expect the federal funds target range to move to 3.75%–4%.
Reuters also reported that Morgan Stanley economists expect another rate hike in December, while futures implied additional increases could extend through mid-2027. A sustained tightening cycle can raise the cost of capital and encourage portfolio shifts away from assets seen as more sensitive to liquidity conditions.
How the Fed and the Bank of Japan could amplify risk
Policy tightening in the US is not occurring in isolation. The original report noted that the Bank of Japan could move shortly after the Fed decision. According to Reuters reporting referenced in the article, roughly 97% of economists surveyed expect the BOJ to raise its policy rate to 1.25% on September 18, with many anticipating further increases afterward.
Higher Japanese rates matter for global risk assets because they can affect yen-funded carry trades. When borrowing costs rise in Japan, it may become more expensive to fund positions abroad, leading traders to unwind trades that previously supported demand for risk-sensitive assets, including equities and cryptocurrencies.
Technical signals point to weakening momentum
Beyond macro catalysts, the selloff aligns with technical indicators that suggest momentum is losing steam after a sharp run. While the BTC/USD daily chart remains described as bullish, the original analysis highlighted signs of weakening follow-through.
Specifically, the relative strength index at 52 remains above neutral, but it is well below an earlier overbought level of 83 recorded when Bitcoin topped $82,000 on August 21—indicating that the earlier surge has cooled. In addition, the MACD lines are converging toward negative territory, suggesting bearish momentum could be building if selling pressure persists.
The article also referenced chart structure, including a rounded-top formation. If Bitcoin confirms that pattern and loses the neckline near $76,000, the breakdown risk would increase toward the $70,000–$71,000 region. The analysis further pointed to a confluence of macro factors—higher yields, elevated oil, and coordinated tightening expectations—that could help trigger technical deterioration.
On the other hand, a recovery above $80,000 would likely reduce near-term bearish pressure, the report noted, leaving Bitcoin exposed to a deeper correction only if liquidity conditions remain tight and key levels fail.
Bigger picture
Bitcoin’s retreat reflects a broader market shift toward higher discount rates and tighter global liquidity expectations ahead of major central bank decisions. With the Fed’s Wednesday move and the BOJ decision later in the week on the calendar, crypto traders may treat changes in Treasury yields, oil prices, and policy-rate probabilities as leading signals for risk appetite.
Investors will likely focus next on the reaction of US yields around the Fed announcement and any updates to expectations for additional Fed or BOJ steps, especially if tighter financial conditions reinforce the technical downside scenario.
