Bitcoin recorded limited movement, trading near $83.4K as it attempted to recover from its recent losses amid pressure from elevated bond yields and ongoing tensions between the United States and Iran, which pushed investors away from high risk assets.
The world’s largest cryptocurrency gained 0.6% to $83,637.1 after briefly testing the $85K level during the weekend before quickly reversing lower. The market received some support from Citigroup expanding its digital asset services to Japan and the United Arab Emirates, raising expectations for broader adoption of digital assets by traditional financial institutions.
Cryptocurrency markets remained under pressure due to the sharp rise in Treasury yields, as investors continued pricing in expectations for further Federal Reserve rate hikes. Key employment data expected this week is likely to provide additional signals regarding the future path of interest rates.
The 10 year U.S. Treasury yield climbed to its highest level in 19 years during September after the Federal Reserve raised interest rates by 25 basis points and maintained a hawkish stance to address persistent inflation pressures. In addition, oil prices surged this week as negotiations between Washington and Tehran stalled, after President Donald Trump denied offering any relief to Iran regarding the Strait of Hormuz and its nuclear ambitions.
Tensions between Saudi Arabia and the Houthis also remained a factor keeping markets cautious over potential disruptions to oil supplies, limiting demand for riskier assets. Higher interest rate environments tend to weigh on speculative assets such as cryptocurrencies due to the increased opportunity cost compared with fixed income instruments.
Meanwhile, a report issued by Democratic members of the U.S. Senate indicated that Tether’s stablecoin USDT had become an important financial channel for Iran and a tool allegedly used to support sanctioned entities. The report stated that a significant portion of Iranian cryptocurrency wallets under sanctions had conducted transactions using the stablecoin.
Regarding other digital assets, alternative cryptocurrencies recorded modest gains as they partially recovered from weekend losses. Ethereum rose 1.8% to $2,698.46, while Ripple gained 1.6%. Meanwhile, Solana, Cardano, and BNB showed limited movements within narrow trading ranges as the broader crypto market continued to react to interest rate expectations, bond yields, and global risk sentiment.
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