The recent rise in U.S. Treasury yields places pressure on the cryptocurrency market, including Bitcoin, despite its previous successes.
Impact of Rising Treasury Yields on Bitcoin
Bitcoin has seen significant growth over the past years, reaching record highs in December 2023. A key driver of this growth has been substantial ETF inflows. However, the cryptocurrency market faces threats due to rising U.S. Treasury yields following the Federal Reserve's recent decision to cut rates by 0.25%. This could negatively impact risky assets like Bitcoin.
Current Market Conditions Analysis
Rising U.S. Treasury yields prompt investors to shift from risky assets to safer options. This is evidenced by money market fund assets rising to $6.83 trillion. Conversely, Bitcoin and other cryptocurrencies perform better when Treasury yields fall.
Bitcoin Outlook and Technical Analysis
In the short term, Bitcoin could continue to show positive performance due to the January effect and other factors such as FTX inflows and changes in SEC leadership. Technically, Bitcoin is supported by an ascending trendline and the 50-day moving average.
Bitcoin faces significant challenges due to changes in financial markets. However, its real outlook depends on numerous factors, including macroeconomic policies and internal market trends.
