Bitcoin fights for local uptrend as US bond yields drop from new 24-year highs

US bond yields dropped dramatically on Thursday's opening at Wall Street, while Bitcoin (BTC) attempted to maintain an upward local trend of higher lows. BTC surged above $84,000 during the market's open after US bond yields declined following the establishment of multi-decade high levels. TradingView data indicated that BTC/USD was maintaining a pattern of higher lows on hourly timeframes, increasing by 0.6% for the day.

BTC/USD's one-hour chart displayed this trend. Both the US 30-year and 10-year bond yields reached new all-time highs, with the latter hitting 5.342% – a level not observed since April 2002 – before settling at 5.251% at the time of reporting. Mahmood Pradhan, a former deputy director of the European department at the International Monetary Fund, explained the reasoning behind the ongoing bond-market sell-off to the New York Times.

He stated that global markets were "very nervous" about increasing public debt, with rising yields leading to higher interest costs for governments. Pradhan attributed the current situation to the Middle East war, which has caused an increase in oil prices, reflected in inflation data. Cointelegraph previously reported that US Personal Consumption Expenditures (PCE) index for August, the Federal Reserve's preferred inflation gauge, came in below expectations at 3.4% year-on-year.

Market reaction to the softer reading was minimal, with analysts attributing most of the decline to a change in how PCE was calculated. Crypto analyst Benjamin Cowen noted that yields had rapidly increased as market concerns grew regarding the Fed's failure to address inflation adequately. Cowen emphasized that the bond market revolt would likely persist until the Fed effectively tackles inflation.

Bitcoin's price action showed strong liquidity on exchange order books above and below the current spot price, with $84,500 and $82,900 identified as key areas of interest. Liquidations over the past 24 hours amounted to $25 million, as nearby long and short positions helped maintain range-bound conditions. Rekt Capital, a trader and analyst, predicted another dip to the key support level around $82,500.

A successful retest of this level could potentially initiate the next trend continuation. However, Rekt Capital cautioned that history suggests this retest could be messy and urged not to look too far ahead.