Bitcoin Slides Beneath $83,000 Amid Oil Jump and US Rate Hike Fears

Bitcoin’s value declined in tandem with other assets as oil surged and borrowing costs climbed.

On Wednesday morning in New York, the top digital asset changed hands at $83,062, a drop of nearly 4% over 24 hours, after hitting a low of $82,823. The previous week, bitcoin had almost reached $87,086 at its peak.

Long positions on bitcoin worth roughly $178 million were liquidated over the past day, Coinglass data shows.

U.S. mortgage rates rose for a seventh consecutive week to near three-year highs, coinciding with bitcoin’s steep decline.

Borrowing costs increased because of rising oil prices, which sparked worries that the Federal Reserve might raise rates once more. The Fed did hike rates last month.

Historically, bitcoin has performed well when interest rates were low and has shown short-term sensitivity when the Fed signaled possible increases in borrowing costs.

Brent crude oil surged past $102 after Iran intensified strikes on ships in the Strait of Hormuz.

Wednesday saw declines across multiple assets, with gold, silver, and equities also falling in response to the developments.

The increase in oil prices is fueling what many politicians describe as a cost-of-living crisis in the U.S. Americans head to the polls on November 3, with high inflation among the most prominent issues.

Even with bitcoin’s drop on Wednesday, the cryptocurrency recently turned in its best quarterly performance in years. Analysts state that the token is in a bull market after climbing above its 365-day moving average.

Last month, the leading cryptocurrency ignored both the Federal Reserve’s rate increase and lawmakers’ blocking of the Clarity Act, a landmark crypto bill.