Traders are on edge, eagerly watching the Federal Reserve meeting for clues about prospective interest rate changes.
Amid eventful financial dynamics, US Treasury yields edged higher earlier today, while the crypto market, specifically Bitcoin (BTC), is experiencing a downturn with the coin’s price plummeting to $42,000.
The simultaneous rise in Treasury yields and the drop in Bitcoin’s price prompts discussions about the relationship between traditional and crypto markets. Historically, these markets have exhibited a degree of inverse correlation, with investors often moving funds between traditional safe-haven assets and riskier, more volatile cryptocurrencies.
Treasury Yields and the Fed Meeting
According to reports, the yield on the benchmark 10-year Treasury note inched slightly higher at 4.2563%, while the yield on the 30-year Treasury bond rose just under a point to 4.3339%. The movement in yields comes as investors eagerly await signals from the Federal Reserve regarding potential interest rate cuts.
Traders are on edge, eagerly watching the Federal Reserve meeting for clues about prospective interest rate changes. The outcome might have far-reaching consequences for many areas of the economy. Investors are looking for hints on when authorities would start cutting interest rates, prompted by recent economic statistics and the unexpected reduction in unemployment announced in November’s US jobs report.
However, the University of Michigan’s consumer data, released on Friday, provided a boost to risk sentiment. The report indicated resilient economic activity and cooling inflation, fostering hopes of a much-desired “soft landing” scenario in the US. This optimism followed the surprise drop in unemployment and added to the growing confidence in the US economic recovery.
As part of the financial ecosystem, auctions for Treasury bills and notes are scheduled for later today, December 11 with $75 billion of 13-week Treasury bills, $68 billion of 26-week bills, $50 billion of 3-year notes, and $37 billion of 10-year notes up for grabs.
Bitcoin’s Correction Amid Profit-Taking
Despite the excitement in traditional financial markets as showcased by the Treasury Yields, the crypto market offers a different picture. Bitcoin (BTC), the leading cryptocurrency, is experiencing a downturn, with its price plummeting to $42,000. This decline is attributed to profit-taking among investors, following Bitcoin’s recent surge to a high of $44,705. The 5.7% drop from Friday’s peak suggests a correction or profit booking, as highlighted by CoinDCX Research Team.
Edul Patel, CEO of Mudrex, commented on the situation, stating that “Bitcoin is facing increased take-profit and sell orders, triggering market-wide liquidations after reaching a new yearly high of US$44,700 last week.” Patel notes that the market movement is crucial, suggesting that a break above $44,700 could signify a continuation of the uptrend, while a drop below may find support at $40,600.
The broader crypto market reflects this volatility, with the total volume in Decentralized Finance (DeFi) standing at $8.88 billion, comprising 13.68% of the total crypto market 24-hour volume. Stablecoins continue to dominate, with a volume of $56.69 billion, constituting 87.38% of the total crypto market’s 24-hour volume.
In the last 24 hours, Bitcoin’s market capitalization fell to $829 billion, according to CoinMarketCap. Notably, BTC’s volume in the last 24 hours saw an 84.69% increase, reaching $26.97 billion.