Bitcoin slips below $85,000 as 5% Treasury yield returns to haunt risk assets

According to CryptoSlate, Bitcoin fell below $85,000 on Sept. 23 after stronger-than-expected US business activity sent Treasury yields higher and flushed leveraged longs. The reversal interrupted a rebound that had previously pushed Bitcoin toward $87,000.

Selling intensified following the release of S&P Global's September flash purchasing managers’ indexes. Within an hour, $135.8 million of crypto positions were liquidated, with longs accounting for $125.9 million. Bitcoin accounted for $47.4 million of the total, while Ether accounted for $23.9 million. Across a 24-hour period, total losses reached $510 million.

The economic data showed accelerating US growth alongside renewed cost pressures, strengthening the case for a tighter-for-longer Federal Reserve policy. S&P Global reported that its composite PMI climbed to 58.4, and companies noted rising input costs driven by higher oil prices and supply-chain bottlenecks.

Bond markets reacted immediately, pushing the 10-year Treasury yield back above 5%. James Lavish of the Bitcoin Opportunity Fund noted that Treasury supply is colliding with concerns over structural dollar debasement. With short positions already cleared, Bitcoin now requires fresh spot demand to recover the $85,000 level.