Three Reasons Why Bitcoin (BTC) Could Be About to Fall Back to $20,000.

Despite sharp downside in the US stock market on Tuesday amid a fresh push higher in long-dated US yields to new multi-decade highs as traders pricing in a policy of higher interest rates for longer from the US Federal Reserve, Bitcoin (BTC) continues to hold up relatively well.

It was last trading in the $26,200s, more than 17% down from the yearly highs it set in July above $31,800.

However, the BTC price remains more than 5% up from earlier monthly lows, as it clings on to its 21DMA for now.

While enthusiasm has faded, investors continue to seem keen to accumulate Bitcoin ahead of next year's halving and in anticipation of spot Bitcoin ETF approvals.

This has been holding the BTC price in the upper $20,000s in recent months, but the case is building for a drop back towards $20,000.

Here are three reasons why.

Macro Headwinds Are Building.

Bitcoin is down around 15% since the start of Q3, thanks to a rise in US bond yields and the US Dollar Index (DXY).

The US 10-year yield was last at 4.54%, its highest since 2007, while the 30-year yield was last at 4.68%, its highest since 2011.

The DXY, meanwhile was last at its highest levels since December 2022 above 106.

This trend is being driven by increasing bets that the US Federal Reserve will leave interest rates at higher levels for longer thanks to inflation which is expected to remain at structurally higher levels over the coming years given the US economy's continued outperformance.

But the Bitcoin (BTC) price has stabilized in recent weeks, despite continued upside in yields and the US dollar.

Arguably then, the cryptocurrency doesn't properly reflect recent changes to the macro landscape could well see some "catch-up" via a break back to the low $20,000s.

Macro is likely to remain a headwind for Bitcoin until optimism about a rate-cutting cycle takes the edge off of the recent US yield rally.

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