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Key TakeawaysBitcoin rose around 1% to roughly $84,800 as U.S. Treasury yields retreated sharply ahead of Friday's September jobs report.The 10-year Treasury yield fell about 9.4 basis points to 5.217% after reaching 5.36% earlier in the session.Expectations for another Federal Reserve rate hike in October dropped sharply, with market-implied odds falling to around 30% from 70% earlier this week.French government bond yields surged relative to German Bunds, pushing the spread to 135 basis points and weighing on the euro.Oil prices jumped amid renewed Middle East tensions, with WTI rising to $92.63 and Brent reaching $101.53.Markets now turn to Friday's U.S. Nonfarm Payrolls report, with economists expecting 90,000 new jobs and a 4.1% unemployment rate.Bitcoin moved higher on Thursday as U.S. Treasury yields retreated and traders reduced expectations for another imminent Federal Reserve rate hike ahead of the closely watched September U.S. jobs report.Bitcoin traded around $84,800, up approximately 1% over the previous 24 hours, after spending much of the session relatively subdued.The modest recovery came alongside a sharp reversal in U.S. government bond yields, providing some relief to risk assets following a dramatic September selloff in Treasuries.Bitcoin Gains as U.S. Treasury Yields RetreatThe U.S. 10-year Treasury yield fell around 9.4 basis points to 5.217% after reaching as high as 5.36% earlier Thursday.The policy-sensitive two-year Treasury yield declined even more sharply, falling about 12.3 basis points to 4.764% as traders reduced bets on additional Federal Reserve tightening.Lower Treasury yields can support Bitcoin and other risk assets by reducing the relative attractiveness of risk-free government debt and easing financial conditions.The move follows an unusually volatile month for bonds.The 10-year Treasury yield climbed 53 basis points in September, its largest monthly increase since September 2022.Bitcoin proved relatively resilient despite that surge, gaining 6.3% in September. The S&P 500 slipped just 0.45%.Fed Rate Hike Odds Drop Ahead of Jobs ReportExpectations for additional Federal Reserve tightening have shifted rapidly.Market-implied odds of a Fed move at the Oct. 28 meeting fell to roughly 30%, compared with around 70% earlier this week. Expectations for at least one additional rate increase before the end of the year also declined to about 80% from 95% a week earlier.Federal Reserve Vice Chair Philip Jefferson added to the cautious tone Thursday, saying policymakers need additional time to assess the changing macroeconomic environment before determining whether further tightening is appropriate.Jefferson pointed specifically to the recent increase in yields across the Treasury curve as evidence that investors are reassessing the economic outlook.The shift in expectations has helped pull short-term Treasury yields lower despite economic data continuing to show a relatively resilient U.S. economy.U.S. Jobs Report Becomes Bitcoin's Next Major CatalystAttention now turns to Friday's September Nonfarm Payrolls report, which could determine whether the Treasury-yield reversal continues.Economists expect the U.S. economy to have added approximately 90,000 jobs in September, while the unemployment rate is forecast to remain at 4.1%.Initial jobless claims released Thursday showed little evidence of significant labor-market deterioration.Claims fell slightly to 197,000, compared with 198,000 previously and expectations of 200,000. The four-week moving average declined to 200,000 from 202,500.A weaker-than-expected payrolls report could further reduce expectations for Fed tightening and put additional downward pressure on Treasury yields.A stronger report, however, could revive concerns that monetary policy may need to remain restrictive for longer.That makes Friday's employment data an important near-term catalyst for Bitcoin, the U.S. dollar, bonds and equities.U.S. Manufacturing Remains Strong as Inflation Pressures RiseThursday's manufacturing data complicated the outlook for the Fed.The ISM Manufacturing PMI slipped slightly to 54.5 in September from 54.6, remaining comfortably above the 50 level separating expansion from contraction.New Orders strengthened to 55.3 from 53.7.The bigger concern came from prices.The Prices Paid Index jumped to 77.9 from 71.1, significantly above expectations of 72.3, signaling increasing cost pressures across the manufacturing sector.Survey respondents reported broad increases in commodity prices, reinforcing concerns that inflationary pressures remain elevated even as markets reduce expectations for another immediate Fed rate hike.French Bond Selloff Adds New Risk for Global MarketsEuropean markets are also becoming an increasingly important part of the macro picture.France's 10-year government bond yield climbed another eight basis points Thursday even as Germany's benchmark 10-year Bund yield fell around six basis points.That pushed the spread between French and German 10-year yields to approximately 135 basis points, well above the roughly 50–80 basis-point range seen over much of recent years.Credit default swap spreads on French government debt also reportedly climbed to their highest level in 13 years.The widening spread has revived concerns over European sovereign-debt risk and contributed to pressure on the euro.The EUR/USD exchange rate fell around 0.9% to $1.1231, its weakest level in roughly five months, as investors moved toward the U.S. dollar.For Bitcoin, the situation creates competing forces. Falling U.S. yields can support risk assets, while rising European financial stress could strengthen demand for the dollar and increase broader market volatility.Oil Jumps as Middle East Tensions EscalateEnergy markets moved sharply in the opposite direction.WTI crude had initially fallen below $89 per barrel before reversing higher to around $92.63, up 2.5%.Brent crude climbed approximately 3.6% to $101.53.The reversal followed reports of increased U.S. military deployments to the Middle East, renewing concerns over potential escalation and regional energy supplies.Higher oil prices could complicate the Fed outlook if they feed into broader inflation pressures, particularly at a time when manufacturing data is already showing rising input costs.NEAR Drops 9% Following Security IncidentCrypto markets also faced a separate security event involving NEAR.The NEAR token fell around 9% after blockchain investigator ZachXBT reported that NEAR Intents had suffered an exploit involving approximately $3.8 million.The NEAR Intents team subsequently confirmed that services had been stopped after detecting a security incident involving the interaction between Omni deposit and withdrawal infrastructure and the NEAR Intents smart contract.The team said the contract-side vulnerability had been patched and that operations were expected to resume.Bitcoin Enters Q4 After 42.7% Quarterly GainDespite the latest macro uncertainty, Bitcoin enters the fourth quarter following one of its strongest quarters in recent years.BTC gained 42.7% during the third quarter, its strongest quarterly performance since its 68.7% increase in the first quarter of 2024.Ether performed even better, gaining 70.8% during Q3, its strongest quarterly advance since the first quarter of 2021.Bitcoin is now trading around the mid-$80,000 range as markets assess whether declining Treasury yields can provide enough support for the rally to continue.For the immediate outlook, Friday's U.S. employment report is likely to take center stage.With Fed expectations changing rapidly, Treasury yields near multi-decade highs, European bond-market stress increasing and oil prices back above $100 for Brent, Bitcoin's next major move may depend less on crypto-specific developments and more on the direction of global rates and the U.S. labor market.