Despite a stock market selloff driven by rising bond yields impacting risk-sensitive assets, Bitcoin and other cryptocurrencies maintained relative stability on Wednesday. Traders remain optimistic about substantial gains in the coming weeks.
Over the past 24 hours, the price of Bitcoin dipped by less than 1%, settling at $27,550. It fluctuated within the range of $27,300 to $27,700 during the last day. The leading digital asset held its ground comfortably above the $26,000 level, which had defined trading for over a month. However, Bitcoin retreated slightly from its recent peak above $28,000 earlier this week.
Alex Thorn, head of research at the crypto financial services group Galaxy, noted, “Despite the surge in yields and the strength of the dollar, Bitcoin has demonstrated remarkable resilience, thanks to limited selling pressure and the strong conviction of long-term holders. A decisive break above $28,000 could pave the way for Bitcoin to test the $30,000 range.”
Interestingly, while the Dow Jones Industrial Average and S&P 500 experienced declines this week, Bitcoin remained relatively stable. It held its ground above its previous trading range and came close to recent highs despite the notable increase in bond yields. The yield on the 10-year U.S. Treasury note exceeded 4.8% on Wednesday for the first time since 2007, a development that has sparked concerns about future interest rates.
The rise in yields typically exerts pressure on risk-sensitive assets, as higher returns on government debt reduce the appeal of riskier investments like Bitcoin. While climbing yields have impacted stocks, cryptocurrencies have demonstrated resilience, with traders maintaining a bullish outlook following a historically strong September. This optimism may pave the way for further gains in the upcoming month.
Alex Thorn added, “October has historically been Bitcoin’s best-performing month since 2014, with an average monthly gain of 19.48% over the last nine years. Market participants have actively positioned themselves for substantial Bitcoin gains in October, with many willing to pay significant options premiums to capture potential profits.”
Beyond Bitcoin, Ether, the second-largest cryptocurrency, experienced a marginal drop of less than 1%, reaching $1,650. Smaller tokens or altcoins exhibited mixed performance, with Cardano declining by 1.5% and Polygon registering a 3% increase. Memecoins, on the other hand, showed weakness, with Dogecoin decreasing by 2% and Shiba Inu shedding 1%.