Bitcoin (BTC) fell further at Wednesday’s Wall Street open as oil prices gained on US-Iran war headlines and stocks came off all-time highs.
Key points:
- Bitcoin fell to $82,734 on Bitstamp, marking its lowest levels so far traded in October.
- US bond yields spiked to new 24-year highs and Brent crude oil prices rose to $102 per barrel after Iranian comments on shipments through the Strait of Hormuz.
- BTC price analysis warns of lackluster demand on both spot and derivatives markets.
Bond yields set new 24-year high on Iran oil clampdown
Mixed signals over oil traffic through the Strait of Hormuz pushed Brent crude oil to $102 per barrel on the day, while WTI crude reached $91.
An adviser to Iran’s Revolutionary Guards’ Commander quoted by Reuters on the day warned of a clampdown on traffic that it had “deemed illegal.”
“The Strait of Hormuz is closed, and the armed forces of the Islamic Republic of Iran have full control over it. This situation will continue until Iran’s legitimate demands are met,” he said.
US bond yields, highly sensitive to concerns about inflation and government debt loads worldwide, reacted with new 24-year highs. The 10-year and 30-year yields reached 5.36% and 5.73%, respectively.
At the same time, US stock markets headed lower after hitting fresh all-time highs on Tuesday. The S&P 500 traded down 0.6% on the day to 7,773 points.
Muhammad Qubbaj, co-head of North America interest rate product sales and trading at Goldman Sachs FICC and Equities, predicted that yields would “likely be under ongoing pressure amid elevated energy prices and subdued demand from institutional investors,” as reported on Tuesday.
He forecast in a webinar that rising oil prices would “likely be the key factor in longer-term interest rates.”
Bitcoin demand lacking as upside momentum fades
With Bitcoin still unable to break through overhead ask liquidity around $87,000, analysis warned of waning demand on both spot and derivatives markets.
“Since September 22, Bitcoin has remained at a similar price level, while Bitcoin Open Interest has declined by nearly 10%, from approximately $28.8B to $26.0B,” onchain analytics platform CryptoQuant reported on Wednesday.
“This suggests that, amid subdued spot demand, futures traders have also shown limited willingness to take on additional risk.”
The move to $83,000 invalidated support previously provided by Bitcoin’s 21-day simple moving average (SMA) at $83,850. CryptoQuant added that on higher time frames, $69,500 is worth monitoring as the average cost basis for Bitcoin short-term holders — entities holding a given allocation without selling for up to six months.
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