Bitcoin Stalls at $84,000 Resistance as Stronger Dollar, Higher Treasury Yields Weigh

Bitcoin is attempting to break above $84,000, but a stronger U.S. dollar and rising Treasury yields are dampening investor sentiment and making further gains difficult.

Cointelegraph reported on Oct. 13 that Bitcoin rose to around $83,800 near the opening of the previous U.S. stock session, extending its earlier rebound. Gains were limited above $84,000 as sell orders concentrated at that level. CoinGlass data also showed exchange order-book liquidity clustered there.

A sharp slide in South Korean stocks had earlier weighed on global risk assets. The Kospi fell 7.4% over two days, with semiconductor shares leading the decline. Concerns over the cost burden from increased artificial intelligence investment and stronger competitiveness from Chinese chipmakers appeared to hurt sentiment. U.S. stock-index futures also traded lower during Asian hours.

Still, U.S. stocks pared some of their early losses. The S&P 500 and Nasdaq Composite opened lower, briefly turned positive, and later kept declines within 0.5%. Damian Boey, a portfolio strategist at Wilson Asset Management, said the more important shift was not just rising bond yields, but increasing volatility in the bond market. He added that the move was affecting asset prices more broadly.

In the crypto market, the simultaneous rise in U.S. Treasury yields and the dollar has been cited as a key headwind. Darkfost, a contributor at on-chain analytics firm CryptoQuant, said the macroeconomic backdrop has turned unfavorable for Bitcoin as Treasury yields approach their highest levels in about 25 years and dollar strength adds further pressure.

The U.S. Dollar Index, which measures the greenback against six major currencies, has risen 5.5% since Sept. 9 to 102.57. That marks its highest level in about 18 months, the strongest since April last year. Although Bitcoin's traditional inverse correlation with the dollar index has weakened this year, a stronger dollar can still curb market liquidity and demand for risk assets.

Darkfost said these factors are constraining liquidity available to the market and weakening institutional investors' confidence, making them less willing to take on additional risk. He added that Bitcoin is still viewed as a high-risk asset, while mature markets such as the Nasdaq 100 and S&P 500 continue to rise and absorb limited liquidity.