Bitcoin Price Retreats to $66K Amid Rising Treasury Yields: A Market Overview

Key Takeaways:

• Bitcoin struggles around $66,000: Bitcoin faces downward pressure, hovering near $66,000 amid concerns over rising Treasury yields and potential delays in Federal Reserve rate cuts.
• Market weakness persists: The broader crypto market reflects weakness, with Ethereum maintaining above $3,300 and the CoinDesk 20 index experiencing a 0.6% decline.
• Impact of Treasury yields: Elevated Treasury yields, reaching a two-week high of 4.40%, prompt capital outflows from risk assets like Bitcoin, while gold remains resilient amidst market divergence.
• Expert analysis: Director of Capital Formation at Pythagoras Investments, Semir Gabeljic, attributes Bitcoin’s retracement to macroeconomic factors, highlighting the impact of rising interest rates on investor risk appetite.
• Market speculation and position dynamics: Market sentiment is influenced by speculation on Federal Reserve rate cuts, as evidenced by Polymarket data, while leveraged position closures and liquidations contribute to market volatility and investor caution.

Bitcoin, the leading crypto, faced downward pressure, hovering near $66,000 during Asian trading hours on Tuesday. This decline comes as investors grapple with the resurgence of Treasury yields and speculation surrounding potential delays in Federal Reserve rate cuts.

BTC/USD | Source: TradingView

At the time of writing this article,  Bitcoin price traded just around $66,000, maintaining losses amid market uncertainty. Meanwhile, Ethereum (ETH) held steady above $3,300, and the CoinDesk 20 (CD20) index experienced a 0.6% decline, signaling broader market weakness. The 10-year Treasury note saw a two-week high of 4.40%, driven by persistent inflation concerns and robust manufacturing activity. Elevated Treasury yields often prompt capital outflows from risk assets, including cryptos, and non-yielding investments like gold. Despite this, gold remained resilient, highlighting market divergence.

Additional Read: Bitcoin Price Prediction

Semir Gabeljic, Director of Capital Formation at Pythagoras Investments, attributed Bitcoin’s retracement to $65,000 to the macroeconomic outlook, particularly rising interest rates. Historically, higher interest rates dampen investor risk appetite, impacting asset performance.

Polymarket data suggests diminishing expectations of a rate cut by May, with uncertain projections for June. Additionally, the CME Fed Watch tool indicates a 97% likelihood of unchanged rates post-May meeting. Such sentiments influence market sentiment and investment decisions.

Coinglass data revealed over $245 million in long positions liquidated in 24 hours, with $60 million in Bitcoin positions affected. Derivatives trader Jun-Young Heo noted a 10% decrease in global futures open interest, signifying closure of leveraged long positions.

As Bitcoin ETF inflows stagnate and market prices dip below the 20-day moving average, some investors interpret the recent downturn as the conclusion of a two-month rally. This sentiment reflects cautious optimism amid evolving market dynamics.

Bitcoin’s retreat to $66,000 amidst rising Treasury yields underscores the interplay between macroeconomic factors and crypto markets. With market sentiment influenced by interest rate speculation and leveraged position dynamics, investors navigate a landscape shaped by evolving trends and external forces.

Source: CoinDesk