Bitcoin has fallen below $85,000 on Sept. 24, dropping 3% over the past 24 hours as rising US Treasury yields, stronger economic data and long liquidations weighed on the cryptocurrency.
CoinGecko data showed Bitcoin (BTC) trading near $84,300 at the time of writing after falling from close to $87,000 during the previous day.
The selloff briefly took BTC towards $83,500 before buyers pushed the price back above $84,000.
The decline followed a four day recovery that had carried Bitcoin from close to $75,000 to a Sept. 23 high near $87,300. BTC failed to hold above $87,000 and subsequently lost the $86,000 and $85,000 levels.
Despite the daily loss, Bitcoin remained 10% higher over the past seven days and 4.4% higher over the past 30 days, according to CoinGecko.
The cryptocurrency was down 24.8% over the past year.
Why is Bitcoin price going down today?
US Treasury yields rose after S&P Global’s flash composite purchasing managers’ index climbed to 58.4 in September from 56.0 in August.
The reading was the highest since July 2021, while S&P Global said cost growth reached a near four-year high as energy prices and capacity constraints pushed expenses higher.
S&P Global described the combination of strong economic growth and persistent price pressure as a hawkish signal for interest rates.
The manufacturing PMI rose to 57.0, while employment growth reached its fastest pace in more than four years.
Expectations for tighter US monetary policy had already strengthened this week.
Traders were already leaning towards another Federal Reserve rate rise in October as policymakers maintained a hawkish stance.
The 10-year Treasury yield subsequently climbed above 5.1%, reaching its highest level since 2007.
It had been below 5% at the start of the week, when falling yields and lower oil prices coincided with Bitcoin’s recovery.
Selling accelerated as leveraged positions were forced out of the crypto derivatives market.
Liquidation data showed roughly $524 million in positions were liquidated over 24 hours, with longs accounting for close to $454 million.
Bitcoin traders accounted for roughly $146 million of the total, including around $134 million in long positions.
Forced closures added selling as BTC moved through $86,000 and $85,000.
Oil prices contributed to the pressure on bonds after Brent crude rebounded more than 4% towards $104 per barrel.
Oil had fallen earlier in the week as hopes of US-Iran diplomacy and recovering Saudi exports eased supply concerns, with Brent dropping to $100.34 on Sept. 20.
A weak US Treasury auction later added to the rise in yields. The Treasury sold $70 billion of five year notes on Sept. 23 at a yield of 5.033%, compared with 4.393% at the previous auction.
The auction cleared 3.1 basis points above the prevailing when-issued yield of 5.002%.
Its bid-to-cover ratio fell to 2.21 from a six-auction average of 2.33, while indirect bidders took 54.31%, below their 65.2% average.
Options positioning could continue to keep price swings elevated into Sept. 25. Bitcoin has moved below the $85,000 strike ahead of roughly $14 billion in Deribit Bitcoin options scheduled to expire on Friday.
BTC price analysis
Bitcoin’s daily chart still holds above its main exponential moving averages despite the rejection from $87,000.
BTC was trading near $84,160, leaving the price around 4.7% above the 20-day EMA at $80,345.
BTC/USD 1-day price chart. Source: TradingView.
The remaining averages sit lower. The 50-day EMA stands at $76,105, while the 100-day and 200-day EMAs are at $73,042 and $73,825.
Price holding above all four means the drop from $87,300 has not yet broken the structure created during the September recovery.
Daily RSI has fallen to 64.63 after moving above 80 during the earlier run. The indicator remains above its moving average at 59.81 and below the 70 overbought threshold.
If RSI continues to drop below 60 alongside a break under the 20-day EMA would point to momentum weakening further.
Price action leaves $83,500 to $84,000 as the first area to watch. A daily close below that zone could expose the 20 day EMA near $80,345, which sits close to the $80,000 psychological level.
Losing $80,000 would bring the 50-day EMA around $76,105 into view.
The 4-hour chart is weaker than the daily timeframe. MACD has produced a bearish crossover after the rejection near $87,000, with the MACD line at 820 below the signal line at 1,282.
BTC/USD 4-hour price chart. Source: TradingView.
The histogram has fallen to minus 462 as the latest candles moved back towards $84,000.
ADX remains elevated at 39.52 but has dropped from a recent reading above 50.
The decline indicates that the strength behind the preceding 4-hour trend is easing while BTC consolidates below its recent high.
With 4-hour momentum weakening and BTC still below $85,000, the more probable immediate move is a retest of the $83,500 to $84,000 support area before another attempt at the recent high.
A break below $83,500 would leave $82,000 as the next visible price area before the daily 20-day EMA near $80,345.
A daily close below $80,000 would expose the $76,000 region, where the 50-day EMA currently sits.
Such a move would require a much larger pullback from current levels and would weaken the daily structure that remains intact while BTC trades above its major EMAs.
A recovery above $85,000 would reduce the immediate downside pressure and put the $86,000 to $87,300 region back in focus.
BTC would need to clear $87,300 to invalidate the latest rejection, with $90,000 becoming the next visible psychological target.
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