Bitcoin extended losses at Wednesday’s Wall Street open, dropping below $83,000 as oil prices rose and US stocks retreated from record highs. On Bitstamp, BTC fell to $82,734, its lowest traded level so far in October.
The move came as markets reacted to US-Iran war headlines. Oil gained during the session, and equities turned lower after setting fresh all-time highs a day earlier.
Oil spike and Treasury sell-off hit risk assets
Data from TradingView showed BTC/USD slipping under $83,000 and setting a new month-to-date low.
Mixed signals around oil traffic through the Strait of Hormuz pushed Brent crude to $102 per barrel, while WTI crude reached $91.
Reuters quoted an adviser to the commander of Iran’s Revolutionary Guards as warning of a clampdown on traffic it had 「deemed illegal」.
He said: 「The Strait of Hormuz is closed, and the armed forces of the Islamic Republic of Iran have full control over it. This situation will continue until Iran’s legitimate demands are met.」
US bond yields, which are highly sensitive to inflation concerns and government debt burdens worldwide, reacted by climbing to new 24-year highs. The 10-year yield reached 5.36%, while the 30-year yield rose to 5.73%.
US stocks also moved lower after Tuesday’s record highs. The S&P 500 was down 0.6% on the day at 7,773 points.
Muhammad Qubbaj, co-head of North America interest rate product sales and trading at Goldman Sachs FICC and Equities, said on Tuesday that yields would 「likely be under ongoing pressure amid elevated energy prices and subdued demand from institutional investors,」 according to the report.
In a webinar, he said rising oil prices would 「likely be the key factor in longer-term interest rates.」
CryptoQuant points to weak spot and derivatives demand
Bitcoin has also failed to break through overhead ask liquidity around $87,000, and market analysis warned that demand was fading in both spot and derivatives markets.
CryptoQuant wrote on Wednesday: 「Since September 22, Bitcoin has remained at a similar price level, while Bitcoin Open Interest has declined by nearly 10%, from approximately $28.8B to $26.0B.」
It added: 「This suggests that, amid subdued spot demand, futures traders have also shown limited willingness to take on additional risk.」
The drop toward $83,000 also invalidated support previously provided by Bitcoin’s 21-day simple moving average at $83,850.
CryptoQuant said that on higher time frames, $69,500 is worth watching as the average cost basis for Bitcoin short-term holders, defined here as entities that have held an allocation without selling for up to six months.