CryptoSlate
Bitcoin fell below $85,000 after stronger-than-expected US business activity pushed Treasury yields higher and triggered a wave of leveraged long liquidations. Within an hour, $135.8 million in crypto positions were wiped out, including $125.9 million in longs. Bitcoin accounted for $47.4 million and Ether for $23.9 million. Over 24 hours, liquidations reached $510 million across 122,256 traders.
Why it matters
The reversal followed S&P Global's September flash purchasing managers' indexes. The composite PMI rose to 58.4, its highest level in more than five years, while services reached 58.7 and manufacturing hit 57. All three readings exceeded expectations. S&P Global economist Chris Williamson said the survey was consistent with annualized growth of about 5%, with roughly 4% growth signaled for the third quarter.
The growth came with a sharper inflation warning. Companies reported the steepest increase in input costs in four years, citing higher oil prices, transportation expenses, supply-chain bottlenecks and rising backlogs. Strong demand and limited capacity are giving businesses more pricing power, complicating the outlook for interest-rate cuts.
Market impact
The 10-year Treasury yield moved back above 5%, near levels last seen in 2007, while the two-year yield reached its highest level in about 27 months. Higher yields raise the opportunity cost of holding risk assets and give the Federal Reserve more room to keep policy restrictive.
Bitcoin had recently pushed through $86,000 toward $87,000 as short covering accelerated the rebound. That bearish positioning has now been reduced, removing a key source of buying pressure. Reclaiming $85,000 will require fresh spot demand while bond yields remain elevated. Investors are also watching whether higher borrowing costs and increased Treasury supply create further pressure across risk markets.
Frequently asked questions
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Why did Bitcoin fall below $85,000?
Stronger US business activity pushed Treasury yields higher and pressured risk assets. The move also triggered leveraged long liquidations after Bitcoin's rebound had already cleared much of the short-covering fuel.
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How much crypto was liquidated in 24 hours?
Liquidations reached $510 million across 122,256 traders. Long traders accounted for $363.83 million of the losses.
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What did the September PMI data show?
S&P Global's composite PMI rose to 58.4, services reached 58.7 and manufacturing hit 57. All three readings exceeded expectations and pointed to faster US growth.
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Why are higher Treasury yields negative for Bitcoin?
Higher yields increase the opportunity cost of holding risk assets and give the Federal Reserve more room to keep interest rates restrictive. That creates a tougher backdrop for Bitcoin's rebound.
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What support does Bitcoin need to reclaim $85,000?
Bitcoin needs fresh spot demand because the short-covering boost that helped drive its move toward $87,000 has largely faded. Elevated Treasury yields remain a source of pressure on risk assets.
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