Bitcoin was down 3.80% at around $83,880 over the previous 24 hours, although the cryptocurrency remained up more than 10% over the past week.
Ethereum was also lower, trading around $2,682.
The immediate pressure came from the US bond market.
Stronger-than-expected US business activity pushed Treasury yields higher, with the 10-year yield rising to 5.11% and the two-year yield climbing to 4.85%. The 10-year yield was at its highest level since 2007, according to market commentary.
Purvang Mashru, Lead Analyst at BitDelta India, said the rise in yields and changing expectations around US interest rates had added pressure to risk assets. He noted that the reversal was particularly pronounced in higher-beta cryptocurrencies, with Dogecoin, Avalanche and Cardano among the sharper decliners.
According to the CoinSwitch Markets Desk, rising US borrowing costs are a key macro concern.
Higher yields can increase the government’s interest burden and potentially add to fiscal deficits, which could require further debt issuance. This, in turn, could contribute to a cycle of higher yields and tighter financial conditions.
Why are cryptocurrencies falling despite ETF inflows?
Institutional demand has remained relatively strong even as prices have pulled back. US spot Bitcoin ETFs recorded about $714.7 million of inflows in the latest session, while Ether ETFs saw $162.2 million.
Mudrex said US spot Bitcoin ETFs attracted around $1.7 billion over two days this week.
Vikram Subburaj, CEO, Giottus, said Bitcoin’s recent decline should be viewed in the context of its sharp weekly rally. Bitcoin had earlier climbed to an eight-month high of about $87,359 before retreating towards $84,400.
He added that the decline was largely a cooling-off move after the recent rally rather than a confirmed reversal.
Nischal Shetty, Founder of WazirX, also pointed to continued institutional demand, noting that US spot Bitcoin ETFs had recently seen nearly $1 billion in daily net inflows.
However, he said rising Treasury yields above 5% were making bonds relatively more attractive and weighing on risk appetite across equities and crypto.
Geopolitical risks add to market uncertainty
The crypto market is also being influenced by developments in the West Asia.
Riya Sehgal, Research Analyst at Delta Exchange, said US-Iran tensions had added to pressure on risk assets, while a rise in Brent crude towards $103 a barrel reinforced concerns around inflation.
She said the decline in Bitcoin was also amplified by around $280 million in Bitcoin long liquidations over a four-hour period.
What levels are traders watching?
Bitcoin’s near-term technical picture remains mixed. BitDelta’s Mashru identified support around $84,000, with resistance around $84,619 and $85,000. Mudrex’s Prateek Gupta placed support lower at around $82,500 and resistance at $86,500.
Subburaj said the $84,000-$85,000 zone is an immediate test for Bitcoin. A sustained hold in that area could put the recent high of around $87,400 back in focus, while a break below $84,000 could bring the $81,000-$82,000 range into view.
Shetty identified $83,520 and $81,000 as important support levels, while a sustained move above $87,000 could improve short-term momentum.
The differences in these levels reflect the fact that analysts are using different time frames and technical indicators rather than pointing to a single agreed support or resistance level.
What should investors watch next?
Beyond price levels, upcoming US macroeconomic data could remain important for crypto markets. Subburaj said upcoming US PCE inflation and employment data could influence expectations around the Federal Reserve’s next move.
Gupta also flagged a large Bitcoin options expiry of around $16 billion on Friday, which could contribute to higher volatility in the near term.
Sehgal said markets would also be watching developments around US-Iran negotiations and the proposed Trump-Xi meeting, with progress potentially improving sentiment and renewed tensions adding to pressure from elevated yields and energy prices.
For investors, Shetty said the latest pullback should be viewed in the context of the sharp weekly rally and advised against reacting to a single day’s movement. He suggested that fresh purchases could be staggered rather than made all at once, while traders should keep leverage low and define exit levels before entering positions.