Bitcoin stayed afloat after rebounding from a one-week low reached on Monday as 30-year bond yields soared to their highest level since 2002.
The flagship cryptocurrency inched up 0.1% at $83,574 on Tuesday. It's a rebound from the low of $82,516 reached the previous day, according to LSEG data, but off from an intraday high of nearly $84,500.
Bitcoin continues to pull back from the near eight-month high of $87,315 reached last week. The source of much of the pressure came from yields that found a 24-year high Tuesday, in turn strengthening the U.S. dollar and making assets such as gold and cryptocurrencies less attractive for investors.
But easing the pressure was comments from the Federal Reserve casting some doubt on further rate hikes coming when the Fed meets in October. New York Fed President John Williams said Tuesday that the central bank could wait until December before raising interest rates again.
Even so, the trend of bitcoin is that the heralded return of the "bull market" is already in trouble, said analysts with CryptoQuant in a note. "The rally is running out of steam," said the firm, adding that profit-taking is being seen in the short term.
The firm said that the next support level for bitcoin is seen at $80,000, the 365-day market average. Avoiding that will require strong demand on the spot market pushing past the $87,000 mark.
"Any advance must be carried by spot demand," analysts with Bitfinex said.
The upcoming midterm elections in the U.S. may become another pressure point for bitcoin prices, with bitcoin shedding 37% in November 2018 and 16% in November 2022, said Vanessa Grellet, managing partner with Arche Capital.
But the macro situation in those two years is different than where it sits now, Grellet adds.
"The triggers were crypto-specific and the election simply coincided with the bear market's final flush," she said.
The same factors pressuring bitcoin also tore into gold, with it bearing the brunt of investors' rate-hike concerns after recording its largest percentage decline since June on Monday. It regained some of that lost value Tuesday, with front-month Comex gold rising 0.3% to $5,318.40 a troy ounce.
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