Despite hitting an all-time high of $73,800 nearly three months ago, BTC still needs to revisit these levels, stalling in its price discovery phase.
Bitcoin (BTC) has been showing strong performance, with its price levels staying just below record highs. This trend indicates a normal pause in a bull market. However, a well-known market analyst warns that recent macroeconomic factors could threaten Bitcoin’s growth.
“Bitcoin is still strong, but macro factors are threatening […] Bond yields are very unstable as the demand is weak compared to US Treasuries issuance. If there is a negative impact on bitcoin, it will likely be due to yields and the dollar index,” crypto analyst Chang told CoinDesk in an interview.
Treasury yield volatility is a key factor, driven by US debt concerns, increased bond supply, and a rise in Japanese government bond yields. In the past two weeks, the yield on the 10-year Treasury has jumped 24 basis points to 4.55%, according to TradingView data. Traditional market analysts warn that yields exceeding 4.7% could cause stock market volatility.
Higher yields usually lead to higher borrowing costs for both individuals and companies, making riskier assets like Bitcoin and tech stocks less attractive. Chang expects yields to stay volatile through June, keeping a close link between Bitcoin and stock markets.
Rising Treasury Yields and Their Impact
Currently, the two-year Treasury yield is nearing 5%. The prospect of securing a 5% return on government bonds, considered safe investments, might encourage macro traders to shift their funds away from stocks, cryptocurrencies, and other high-risk sectors.
“We’re now at a level of bond yields where rising yields from here are really going to weigh on all asset classes,” Peter Oppenheimer, head of Macro Research at Goldman Sachs said on Thursday on Bloomberg Surveillance.
Given this backdrop, traders are keenly observing the personal-consumption expenditures (PCE) price index, a critical indicator for Federal Reserve interest rate decisions. The PCE data, which the Fed prioritizes for inflation measurement, is set for release on Friday.
Bitcoin (BTC) Struggles at $69,000 Resistance
As Bitcoin (BTC) approaches the end of May with positive gains, it remains embroiled in a broader struggle to breach and maintain new highs. Despite hitting an all-time high of $73,800 nearly three months ago, BTC still needs to revisit these levels, stalling in its price discovery phase.
Keith Alan, co-founder of trading resource Material Indicators, highlights the importance of overcoming the $69,000 resistance level for a sustainable breakout. “I’m not expecting a legit, sustainable breakout until BTC bulls can validate an R/S Flip at $69k,” he added, indicating that turning this resistance into support is crucial for further price advances.
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