Although Bitcoin has been coming closer to breaching major technical levels, there has been weakness shown by the cryptocurrency in crossing through the $60k range. Experts have decided that this incapability is due to three main reasons- the increase in the yield of Treasury, along with Bitfinex’s bearish movements, and major struggles in the market.
High U.S. Treasury yields cause risk-on markets to slump, affecting Bitcoin
The yield of the US Treasury for 10 years will rise up- which is certainly going to reduce the appetite for assets to have a risk. This is simply because most of the investors would be looking towards safer alternatives to yield-generating especially in bonds of Treasury.
Interestingly, despite Bitcoin not being able to see a bigger correlation with Dow Jones, they have definitely seen a much closer correlation with indices that are very tech-heavy. This is suggestive of a strong momentary acceleration on the part of the US Treasury, which might lead to a stagnation brought on by assets that are risk-on.
The yield in the US Treasury did start coming out above their key labels from the 19th of March. Since that point, Bitcoin has not been able to go above the border of $60,000.
If the cryptocurrency has to feature in a far more sustainable rally, then it would have to be a part of a landscape that favors the macrocosm. This can only be made possible through the stabilization of the yields in the US Treasury.
As stated by a trader for Bitcoin, who is also called the ‘Byzantine General’, there has been quite some pressure for selling on Bitfinex. There have been other derivative platforms of Bitcoin for trading like FTX, BitMEX, and Deribit- which have also seen quite an increase in the short interest.
