Bitcoin fell below $83,000 on Wednesday morning in New York, dropping alongside other assets as oil prices surged and borrowing costs climbed, according to Bitcoin Magazine.
The largest cryptocurrency traded at $83,062, down nearly 4% over the previous 24 hours, after falling as low as $82,823 at one point. Last week, bitcoin had nearly reached $87,086.
Data from Coinglass showed that nearly $178 million in long bitcoin bets were closed over the past 24 hours.
Higher oil and borrowing costs pressure markets
The report said bitcoin’s sharp decline came as U.S. mortgage rates rose for a seventh consecutive week to their highest level in nearly three years. It linked the rise in borrowing costs to a jump in oil prices, which fueled concern that the Federal Reserve may raise rates again. The U.S. central bank increased interest rates last month.
Bitcoin has historically performed well in a low-rate environment and has shown short-term sensitivity when the Federal Reserve signals higher borrowing costs, the report said.
Brent crude tops $102 as multiple assets fall
Brent crude rose above $102 after Iran stepped up attacks on vessels in the Strait of Hormuz. Gold, silver and stocks also declined on Wednesday, with the report describing a broader sell-off across asset classes.
Bitcoin Magazine also said rising oil prices are feeding what many politicians are calling an affordability crisis in the United States. Americans are set to vote on November 3, and surging inflation is one of the most prominent issues in the campaign.
Recent weakness follows a strong quarter
Despite Wednesday’s drop, bitcoin has just posted its best quarter in years, the report said. It also noted that analysts have said the asset entered a bull market after rising above its 365-day moving average.
Last month, bitcoin also absorbed the impact of the Federal Reserve’s rate increase and lawmakers blocking the landmark crypto bill known as the Clarity Act, according to the report.
The article first appeared in Bitcoin Magazine and was written by Mathew Di Salvo.