Bitcoin, the world’s leading cryptocurrency, has failed to break through the $70,000 mark, sparking speculation about the impact of increasing U.S. Treasury yields on its price. While some fear a prolonged decline, others believe that worries about this trend may be exaggerated, with the prevailing sentiment suggesting that Bitcoin is more likely to continue its upward trajectory, especially with the anticipated occurrence of the coveted “golden cross” pattern.
Treasury Yields and Investor Sentiment
The recent surge in the yield of the U.S. 10-year note, surpassing its 200-day simple moving average and hitting a three-month high of 4.26%, has raised concerns among investors. This rise of 60 basis points since the Federal Reserve’s rate cut on Sept. 18 has made bonds more attractive, potentially diverting funds from riskier assets like cryptocurrencies and tech stocks. Notably, Bitcoin’s climb stalled around $70,000 as yields surged, causing a retreat to $67,000.
Amidst these developments, some analysts, such as the pseudonymous The Great Martis, see a challenging environment for risk assets as bond yields continue to rise. However, London-based macroeconomic research firm TS Lombard offers a different perspective, asserting that the increase in Treasury yields is not necessarily bearish for risk assets.
TS Lombard’s Managing Director, Dario Perkins, emphasized that the recent rate cut does not indicate a misstep by the Fed and highlighted the potential for further cuts if economic conditions warrant them. He also pointed out that gold, a traditional safe-haven asset, has been performing well despite rising yields, signaling positive prospects for assets like Bitcoin.
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Golden Cross and Market Outlook
Bitcoin’s technical indicators show a potential “golden cross” formation, where the short-term moving average is poised to surpass the long-term average, typically indicating a bullish trend. While this signal has been criticized for its lagging nature, historical data suggests that it has preceded significant market rallies.
Traders who held Bitcoin following previous golden crosses witnessed substantial returns, with the cryptocurrency reaching new highs after such occurrences. This bullish pattern, combined with the current market dynamics, indicates a positive outlook for Bitcoin in the near term.
As the market navigates the interplay between rising Treasury yields and Bitcoin’s price action, the upcoming golden cross could serve as a catalyst for a potential bull run, offering investors an opportunity to capitalize on the market’s momentum.
Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
