Bitcoin Plunges With Big Bond Selloff

Bitcoin dropped below $83k in the past 24 hours as a massive bond market selloff spoiled sentiment towards risk assets including cryptocurrencies. Strong economic data from the U.S. and the spike in global crude oil prices renewed Fed rate hike fears, triggering a selloff in U.S. bond markets. Yield on the long dated thirty-year bond touched a 22-year high of 5.442 percent in the wake of hot PMI data.

Latest data revealed an unexpected jump in manufacturing as well as service sector activity in the U.S. Flash PMI readings for September showed manufacturing PMI jumping to 57 from 53.9 and services PMI jumping to 58.7 from 56.5. The likelihood of a quarter percentage rate hike by the Fed in October is currently above 70 percent, according to the CME FedWatch tool.

Crypto market sentiment has heavily impacted by the massive spike in bond yields in the U.S. Long dated thirty-year bonds have spiked 0.61 percent overnight to trade at 5.435 percent. Ten-year bonds have jumped 0.35 percent to 5.134 percent. Five-year bond yields have added 0.04 percent to 5.007 percent whereas two-year bond yields have decreased 0.33 percent overnight to 4.879 percent.

The dollar's surge also weighed on crypto market sentiment. The six-currency Dollar Index which measures the U.S. Dollar's strength against a basket of 6 currencies is currently trading at 101.27, implying an overnight addition of 0.17 percent.