As an experienced market analyst, I’ve seen my fair share of trends and fluctuations in the financial world. The current strength of Bitcoin (BTC) is a positive sign, but I can’t ignore the potential threats looming on the horizon. The recent volatility in bond yields, driven by US debt concerns and rising Japanese government bond yields, could have a significant impact on Bitcoin’s growth.
Bitcoin (BTC) has been exhibiting robust performance lately, with its price hovering slightly below all-time highs. This pattern is typical of a bull market’s pause. However, it’s important to note that prominent market analysts have raised concerns about potential threats to Bitcoin’s growth due to recent macroeconomic developments.
“Bitcoin remains robust, but external influences pose risks. The volatility of bond yields is a concern as the demand fails to keep pace with US Treasury bond issuance. Should Bitcoin be affected adversely, it’s expected that yields and the dollar index would be the primary culprits,” suggested Chang in an interview with CoinDesk.
The volatility of treasury yields, primarily fueled by apprehensions over US debt and a surge in bond supply along with an uptick in Japanese government bond yields, has been a significant factor recently. Over the past two weeks, the yield on the 10-year Treasury has risen by 24 basis points to hit 4.55% based on TradingView data. Cautious market analysts issue warnings that yields surpassing the 4.7% threshold might lead to heightened instability in the stock market.
Higher returns on investments often result in increased borrowing expenses for individuals and businesses, diminishing the appeal of riskier assets such as Bitcoin and tech stocks. Expectant economist Chang anticipates yields to remain unpredictable until June, thereby maintaining a significant correlation between Bitcoin’s value and stock market trends.
Rising Treasury Yields and Their Impact
As an analyst, I would rephrase it as: With the two-year Treasury yield approaching 5%, I can see how this attractive return on government bonds, perceived as safe investments, may lure macro traders away from riskier assets such as stocks, cryptocurrencies, and other high-risk sectors.
“According to Peter Oppenheimer, the head of Macro Research at Goldman Sachs, who spoke on Bloomberg Surveillance on Thursday, we’ve reached a point where higher bond yields will significantly impact all types of assets.”
Against this background, traders are closely monitoring the personal consumption expenditures (PCE) price index, an essential gauge for Federal Reserve’s interest rate determinations. The upcoming PCE report, which the Fed heavily relies upon to assess inflation, will be unveiled on Friday.
Bitcoin (BTC) Struggles at $69,000 Resistance
As Bitcoin (BTC) enters the final days of May, it continues to battle for breaking through and holding onto new peak prices. Despite reaching an unprecedented high of $73,800 approximately three months back, BTC must revisit these heights in order to progress beyond its current exploratory phase in pricing.
Keith Alan, the co-founder of trading resource Material Indicators, underscores the significance of surmounting the $69,000 barrier for a lasting Bitcoin price rally. He stated, “I believe a genuine, enduring breakout will only materialize once Bitcoin buyers manage to confirm a Relative Strength Index (RSI) flip at $69,000.” This implies that transforming this resistance into support is indispensable for subsequent price growth.
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2024-05-31 16:06