Bitcoin falls as ETF outflows and rising US Treasury yields weigh on prices

Bitcoin came under pressure below $84,000 on Thursday after failing to close above the $85,000 resistance zone in the previous session, amid early signs of weakening institutional demand, alongside rising US Treasury yields and a stronger dollar.

US spot Bitcoin exchange-traded funds recorded net outflows of $148.69 million on Wednesday, ending a nine-day streak of inflows. The cryptocurrency’s bullish momentum also weakened as Treasury yields and the dollar climbed, keeping investor sentiment toward risk assets cautious.

Institutional demand weakens

Data from SoSoValue showed that spot Bitcoin ETFs recorded net outflows of $148.69 million on Wednesday, bringing a nine-day streak of inflows to an end.

ETF flows had begun to gradually weaken since September 21 before turning negative on Wednesday, signaling that institutional buying momentum may be losing some strength.

If outflows persist and accelerate over the coming days, Bitcoin could face a deeper correction.

Higher yields and stronger dollar limit Bitcoin gains

Bitcoin failed twice this week, on Monday and Wednesday, to reclaim the $85,000 resistance level, leaving the cryptocurrency trading below that threshold.

The 5-year US Treasury yield climbed above 5%, while the 10-year yield exceeded 5.2%, with both reaching their highest levels in around 19 years and remaining elevated.

Higher yields increase the appeal of traditional fixed-income instruments relative to riskier assets such as Bitcoin.

At the same time, a stronger dollar is adding pressure on the cryptocurrency, with the US Dollar Index rising above 101.80 on Thursday to levels not seen since June.

This came despite weaker-than-expected US Personal Consumption Expenditures Price Index data for August, released on Wednesday, which reduced market expectations for a Federal Reserve interest rate hike in October.

According to the CME FedWatch Tool, markets on Thursday were pricing in around a 37.1% probability of a 25-basis-point Fed rate hike at its next meeting, down from 70.86% on Monday.

Bitcoin initially responded positively to the data, rising to a session high of $85,649. However, the gains proved short-lived, with Bitcoin closing Wednesday at $83,623, slightly lower on the day.

Traders are now turning their attention to the US ISM Manufacturing PMI data due on Thursday, followed by the closely watched nonfarm payrolls report on Friday.

Markets will also focus on comments from influential members of the Federal Open Market Committee for fresh signals on the outlook for US monetary policy. Those developments could affect the dollar and, in turn, determine the direction of risk assets such as Bitcoin.