Bitcoin fell in early afternoon European trading Friday as the fallout from a recent spike in Treasury yields continued to weigh on investor sentiment.

The flagship cryptocurrency has stayed largely muted since Wednesday as investor jitters around the potential for further interest-rate rises suppressed risk appetite.

Bitcoin was down 0.5% at $83,942, having pulled back from Monday's $87,315, its highest level since late January. It had risen to a high of $85,214 earlier in the session.

Flows into bitcoin ETFs have slowed as the week progressed but are on course to track week-to-date inflows in excess of $2.6 billion--its best week since October 2025, J.P. Morgan said.

A spike in U.S. Treasury yields this week put cryptocurrencies under the spotlight, however, as the market increasingly anticipates further interest-rate increases by the Federal Reserve.

"With global bond yields at elevated levels, non-yielding assets like bitcoin remain under increased pressure," said Exness strategist Inki Cho in a note. "Looking ahead, the outlook increasingly hinges on whether bond markets find some relief."

Following last week's 25-basis-point interest-rate rise, which brought the fed funds target rate range to 3.75%-4.00%, money markets currently price in a 71% probability of another such hike at the October meeting, according to LSEG.