‘Higher-for-Longer’ Rate Era Puts Bitcoin’s ‘Uptober’ to the Test

Soaring US Treasury yields are putting Bitcoin’s “Uptober” — the market’s term for a typically strong October — to the test. Market participants say the end of this month, when major economies including the US and Japan decide interest rates, could be a turning point for Bitcoin’s price direction.

According to CoinMarketCap on Oct. 20, Bitcoin was trading in the $81,000 range, down about 1.6% from a day earlier. That was nearly 3% lower than a week earlier. The token has fallen about 2.2% so far this month.

Expectations for a typical October rally have also faded. Alternative’s Crypto Fear & Greed Index, a gauge of investor sentiment, fell to 55 on Oct. 20 from 74 on Oct. 1, a drop of nearly 20 points.

Over the same period, the probability on US prediction market Kalshi that Bitcoin would top $87,500 this month slumped to 26% from 72%. If the current trend continues, 2026 would become only the fourth year after 2014, 2018 and 2025 in which Bitcoin ends October in the red.

A fresh climb in Treasury yields is one reason Bitcoin has struggled even during Uptober. According to the US Treasury Department, the benchmark 10-year Treasury yield reached 5.15% on Oct. 19, matching levels last seen in 2007 before the global financial crisis. The five-year yield also rose to 4.94%, nearing 5%.

Bond-Market Stability Is a Condition for Gains

The problem is that rising Treasury yields increase the opportunity cost of investing in Bitcoin. If investors can earn higher returns from safe-haven US government debt, demand for risk assets such as Bitcoin is bound to be spread more thinly.

That helps explain why investors have recently turned to Treasuries as concerns spread over debt burdens at US artificial intelligence companies. Singapore-based crypto investment firm QCP Capital said stability in the bond market is a key condition for Bitcoin’s upward momentum. Broad deleveraging in equities, if it persists, could spill into crypto markets and threaten support at $80,000, it added.

The same backdrop has been reflected in US spot Bitcoin exchange-traded funds, a barometer of institutional money flows. According to SoSoValue, US spot Bitcoin ETFs posted net outflows for two straight weeks.

A combined $910 million was pulled from US Bitcoin ETFs during that period. So far this month, cumulative outflows have reached $90 million, increasing the chances that October will post the first monthly net outflow since July, after three months.

Buying Base Also Remains Fragile

Concern is also growing that elevated interest rates will persist. In a recent Wall Street Journal survey of 71 economists, one in four said the US 10-year Treasury yield would exceed 5% by year-end. One-third said yields above 5% would continue into next year.

Markets are focused on the Federal Reserve’s rate decision scheduled for Oct. 27-28. CME FedWatch showed an 82.8% probability as of Oct. 20 that the Fed would leave rates unchanged this month. The Bank of Japan is also due to announce its rate decision on Oct. 30, an event closely watched because of its connection to the yen carry trade, in which investors borrow cheap yen to buy higher-yielding assets.

Against that backdrop, some analysts argue the foundation for fresh Bitcoin buying remains unstable. A CryptoQuant contributor at XWIN Japan said broad-based buying has yet to emerge among whales, or large investors. For a sustained recovery, spot demand growth must stay consistently positive and accumulation needs to spread across a broader range of investor groups. The key question, the contributor said, is whether a durable buying base can form to support the next upswing.