Why is everything dumping? Mixed treasury auction results point to risk-off

The crypto market shed 2.3% on Oct. 7, and the 42-day Treasury bill auction released at approximately 13:00 ET appears to have catalyzed the broad risk-off move.

The stop-out yield at 4% came in above the median of 3.97%, signaling investors demanded higher compensation to hold short-dated government debt. The uptick in short-end rates tightened financial conditions, triggering immediate equity selloffs.

The SPY 30-minute chart shows a sharp drop starting just after 13:00 ET, coinciding precisely with the release of the auction results.

Trading volume surged on the selloff candles, indicating the move stemmed from a real catalyst rather than random drift. Equities typically react to short-end rate increases, and crypto markets followed the broader risk-off positioning.

Crypto declines

The crypto total market cap was located at $4.28 trillion as of press time, one day after Bitcoin reached an all-time high of $126,000.

Additionally, the correction capped an upward move that began Oct. 1, when the US government entered a shutdown. 

The rally added roughly $12,000 before the recent price peak, with the Treasury auction result appearing to halt momentum.

As of press time, Bitcoin was trading at $121,950, down 2.65% over the past 24 hours. Ethereum slipped 3.8% to $4,510.06, while XRP matched the decline at $2.87. Solana fell 3.7% to $223.82, Cardano dropped 4.5% to $0.8319, and Dogecoin shed 5.4% to $0.2517.

BNB diverges

BNB stood out as the session’s lone gainer among major assets, posting a 6.9% advance to $1,307.61 after touching a new all-time high of $1,350 earlier in the day. 

The token’s strength diverged from broader market weakness, suggesting asset-specific catalysts outweighed macro headwinds.

The selloff reflects the continued sensitivity of crypto to traditional finance signals. Short-end Treasury yields serve as a real-time gauge of market risk appetite, and even modest rate increases can trigger swift deleveraging across risk assets. 

Nevertheless, with Bitcoin still holding above $122,000 despite the correction, the immediate question is whether buyers will defend current levels or whether further Treasury volatility will push markets lower.

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