Bitcoin Slumps Below $28,000 For the First Time Since Late June

(Bloomberg) — Bitcoin reached an almost two-month low as risk aversion weighs on the cryptocurrency market with global government bond yields climbing to the highest in about 15 years.

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“When you throw in what is happening in the bond market, it becomes easy for Bitcoin prices to soften,” Edward Moya, senior market analyst at Oanda, said in a note. “If risk aversion becomes the dominant theme on Wall Street, Bitcoin’s bearish momentum could target the $27,200 level.”

The largest digital asset by market value fell as much as 4.3% to $27,699, extending losses after dropping below $28,000 for the first time since June 20. The decline was the biggest on an intraday basis since July 14.

The gradual slide in the price of Bitcoin in recent weeks has erased about half the gains registered in the wake of BlackRock’s surprise filing for an Bitcoin ETF on June 15. After surging 72% in the first quarter, Bitcoin has declined about 2% since the end of March. The token tumbled 64% last year amid a series of industry scandals and bankruptcies.

“There aren’t enough good headlines coming out of crypto to get people excited,” said Michael Safai, partner at quantitative trading firm Dexterity Capital. “Conversely, rising interest rates and weakened risk appetite are pushing non-crypto-native traders towards safer assets.”

Other cryptocurrencies were lower, with Ether down about 4% and Cardano and Solana’s tokens paring earlier gains.

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The rise in global yields comes as resilient economic data challenges the view that central banks rates are peaking. Higher interest rates generally lessen the appeal of alternative investments such as cryptocurrencies.