This week, Bitcoin experienced a correction, dropping from its all-time high of $108,200 to below $95,000 amid tension in the bond market.
Bitcoin Price Swings and Their Causes
Bitcoin experienced a sharp decline on Tuesday as US bond yields surged to their highest levels in over two years, following stronger-than-expected job vacancy data. The bond market sell-off continued, pushing 30-year and 10-year yields to 4.95% and 4.70%, respectively. Rising yields suggest the market expects the Federal Reserve to maintain a hawkish stance throughout the year.
Market Expectations and Analysts' Forecasts
Some analysts believe bond yields could continue climbing as inflationary pressures persist. Mark Zandi, the Chief Economist at Moody’s, has warned in a recent note that higher yields may affect the stock and crypto markets.
Technical Analysis and Growth Potential for Bitcoin
Despite acknowledging potential near-term volatility due to bond market concerns, legendary trader Peter Brandt remains optimistic about Bitcoin's longer-term outlook. Bitcoin's weekly chart shows a cup-and-handle pattern, a classic bullish continuation formation. Bitcoin also remains above the 50-day moving average, suggesting a possible strong bullish breakout in the coming weeks. The strategic breakout target is at $122,000, which may happen in the weeks ahead.
Bitcoin continues to face pressure amid bond market fluctuations and monetary policy expectations. However, optimistic forecasts and technical indicators point to potential growth in the long term.
