Bitcoin's price fell below $83,000 on Wednesday morning in New York, trading down nearly 4% over a 24-hour period after dropping as low as $82,823. The decline follows a period last week when the cryptocurrency nearly reached $87,086. Coinglass data indicates that nearly $178 million in long bets on bitcoin were closed over the 24-hour timeframe.
The sharp drop coincided with declines across other assets, including gold, silver, and stocks. The broader market movement came as U.S. mortgage rates climbed for a seventh consecutive week to reach their highest level in nearly three years.
Macroeconomic Pressures and Oil Surge
The rise in borrowing costs was driven by a surge in oil prices, which stoked fears that the Federal Reserve might implement further rate hikes. The U.S. central bank had previously hiked interest rates last month. Historically, bitcoin has performed well in low interest rate environments while showing short-term sensitivity when the Federal Reserve threatens to raise borrowing costs.
Brent crude jumped above $102 after Iran increased attacks on vessels in the Strait of Hormuz. The rising price of oil has intensified concerns surrounding a U.S. affordability crisis, positioning surging inflation as a central topic ahead of the November 3 elections.
Wider Market Context
Despite Wednesday's price dip, bitcoin recently recorded its best quarter in years. Analysts have noted that the cryptocurrency is currently in a bull market after moving above its 365-day moving average. Last month, the digital asset advanced even as the Federal Reserve raised interest rates and lawmakers blocked the Clarity Act, a landmark piece of crypto legislation.
