Bitcoin fell further below $84,000 on Wednesday as a combination of high government bond yields and Middle East geopolitical uncertainty continued to pressure digital assets, even as investor expectations for further interest rate hikes by the Federal Reserve eased.

The flagship cryptocurrency was 0.3% lower at $83,367 in morning London trade, pulling further back from the near eight-month high of $87,315 reached last week. The source of much of the pressure came from higher U.S. Treasury yields, which hovered around multiyear highs Tuesday, in turn strengthening the U.S. dollar and making assets such as gold and cryptocurrencies less attractive for investors.

Easing the pressure somewhat were Federal Reserve speeches lowering market expectations of interest-rate hikes in October. New York Fed President John Williams said Tuesday that the central bank could wait until December before raising interest rates again.

U.S. Treasury yields retreated Wednesday from multiyear highs as markets interpreted the speech as dovish, and investor expectations for further rate hikes pared back somewhat.

Even so, the trend of bitcoin is that the heralded return of the "bull market" is already in trouble, said analysts with data platform CryptoQuant in a note. "The rally is running out of steam," said the firm, adding that profit-taking is being seen in the short term.

Bitcoin ETF flows are off to a slower start this week after last week's record haul. J. P. Morgan estimated $56 million of net sales on Monday across the major cryptocurrency exchange-traded products, after last week clocked the biggest inflows recorded all year, at over $3.2 billion.

While bitcoin is struggling to make its next move up after August's comeback, it is still trading at much stronger levels than over the summer, when it languished in the $60,000 zone. The digital currency is on pace for its best quarterly performance since the fourth quarter of 2024.

That extended period of consolidation has helped it build sufficient upside momentum for a surge higher--a move that wiped out shorts and provided a basis for fresh buying, said David Morrison at spread betting firm Trade Nation. "If it can hold and consolidate above $80,000 then this would help to build bullish sentiment," the senior market analyst said.