Key Takeaways
- Bitcoin fluctuated between $78,300 and $79,650 on Wednesday following a U.S. Treasury $6 billion debt buyback.
- Flat price action triggered $59 million in bitcoin liquidations and $223 million across the crypto market.
- Analysts expect larger U.S. Treasury buybacks to fuel a rally, while Kobeissi Letter warns yield may pass 5.00%.
Volatile Trading and Middle East Conflict
Bitcoin experienced another volatile trading period as it swung from just over $78,700 to $79,600, even as reports suggested that the U.S. Treasury bought back $6 billion in long-term debt, tripling levels seen before the recent intervention announcement.
Market data show that before midnight, bitcoin’s price ranged between a high of $78,900 and a low of $78,300. However, Bitstamp data show that in the early hours of Wednesday, the price breached $79,000 and held above that threshold. Around 4:35 a.m. EST, the price peaked at over $79,650 but began retreating immediately as markets reacted to reports of new fighting in the Middle East.
As reported by Bitcoin.com News, the latest escalation in the U.S.-Iran conflict saw crude oil prices spike, with Brent crude topping $100 per barrel for the first time since July 2. Since Aug. 30, Brent crude oil has now gone up by over 10%, and one U.S. bank projects this to reach $120.
After dipping below $79,000, bitcoin’s price rallied again and appeared to lose steam after reclaiming $79,500. Another sell-off sent the price tumbling to $78,095 before a relief rally left it trading just above $78,600 around 12:16 p.m., keeping its market cap almost unchanged at $1.57 trillion.
In the derivatives market, bitcoin’s flat price action triggered $59 million in liquidations, almost evenly split between long and short bets. Overall, cryptocurrency market liquidations topped $223 million, with liquidated long bets accounting for just over $120 million.
This sluggish price action contrasts sharply with bitcoin’s explosive breakout on Aug. 19, when the U.S. Treasury’s bond buyback announcement propelled the asset up by more than $15,000 over the following week. While bitcoin has successfully defended those gains rather than surrendering them, analysts expected the latest intervention to spark a second leg higher.
While bitcoin’s price remained flat, yields on U.S. Treasuries reportedly rallied on the latest U.S. Treasury announcement, which, according to a Kobeissi Letter post on X, suggests the bond market is fighting the U.S. Treasury.
“Without an end to the Iran War, we are on track to see the 10Y Note Yield above 5.00% by next week. American consumers, homebuyers, and borrowers are in for a rude awakening,” the post warned.
