Bitcoin Slips as Treasury Yields Hit 19-Year Peak, Fed Rate Hike Odds Surge
Treasury yield surge to highest level since 2007 and Federal Reserve rate hike expectations of 75% create pressure on Bitcoin and broader crypto markets.
Bitcoin has declined to trade near $83,200, falling below the $84,000 level during Asian trading hours on Thursday, as the US 10-year Treasury yield surged to its highest point since 2007. The sharp move in government bond yields reflects shifting expectations about Federal Reserve policy and economic conditions, creating headwinds for cryptocurrency markets broadly.
Treasury Yields Reach Highest Level Since 2007
The 10-year Treasury yield climbed significantly, closing Wednesday at 5.11%, up from 4.96% the previous day, and reaching 5.13% during intraday trading. According to CME Group, the bond market selloff has been driven partly by stronger US business data and rising oil prices, which have strengthened expectations for additional Federal Reserve tightening.
Rising Treasury yields generally offer investors higher returns on government debt but can increase borrowing costs across the economy and weigh on risk assets like Bitcoin. The US Treasury reinforced these market dynamics Wednesday by announcing a $6 billion ceiling for a Thursday buyback of long-dated bonds with approximately 20 to 30 years remaining, part of a broader program designed to improve liquidity in the long-dated debt market.
Fed Rate Hike Expectations Drive Market Repricing
Market participants have significantly increased their expectations for further Federal Reserve tightening. According to CME Group’s Fedwatch tool, there is now approximately a 75% probability of a rate hike to the 4.00-4.25% range at the Fed’s October 28 policy meeting, up from around 70% probability just days earlier. This shift reflects updated economic data and energy price trends.
Bas Kooijman, CEO and asset manager at DHF Capital, noted that stronger US business activity combined with elevated energy prices have been driving the repricing of rate expectations. “Markets now assign around 70% probability for a hike in October, up from roughly 55% yesterday, while expectations of additional tightening over the coming months have also increased,” Kooijman said in a market analysis. “This repricing continues to underpin both Treasury yields and the dollar.”
An October rate hike would raise short-term borrowing costs, potentially increasing the cost of dollar-funded leveraged Bitcoin trading and putting additional pressure on risk assets.
Historical Patterns and Bitcoin’s Resilience
Despite the recent pullback, Bitcoin has shown surprising resilience, with some analysts noting solid performance against the backdrop of rising rates. James Stanley, senior market analyst for global macro at FOREX.com, identified $82,833 as the next support level to watch if the pullback deepens.
Historically, Bitcoin traders recognize “Red September” and “Uptober” as seasonal patterns with opposing track records. September has traditionally been the weakest month for Bitcoin, with an average return of -2.34%, though Bitcoin has not closed September in negative territory since 2022. This month, Bitcoin has gained 7.35% so far, continuing its winning streak in September after gains in 2023, 2024, and 2025. October has averaged a 19.92% gain historically, making it the second-best performing month after November, though it fell 3.69% last year.
Rising interest rates and strengthening dollar headwinds from Fed tightening expectations create systemic pressure on Bitcoin and all risk assets, making this a critical moment to monitor for the broader crypto market.
Source: CME Group, via Cointelegraph. Not financial advice.