Despite Bitcoin (BTC) hitting an all-time high of $73,800 three months ago, it is currently struggling to reach those levels again, stalling in its price discovery phase. A market analyst, Chang, notes that Bitcoin remains strong but faces threats from macroeconomic factors, particularly rising bond yields. Treasury yield volatility, driven by US debt concerns, increased bond supply, and rising Japanese government bond yields, poses a significant risk. Higher yields lead to higher borrowing costs, making riskier assets like Bitcoin less attractive. The 10-year Treasury yield recently jumped to 4.55%, and yields above 4.7% could cause stock market volatility. The two-year Treasury yield is nearing 5%, potentially shifting investor preference towards safer government bonds over stocks and cryptocurrencies.
Chang expects yields to remain volatile through June, impacting Bitcoin’s performance. Peter Oppenheimer of Goldman Sachs emphasizes that rising yields will weigh on all asset classes. The market is also closely watching the personal-consumption expenditures (PCE) price index, a key inflation measure for the Federal Reserve's interest rate decisions, due for release soon. Bitcoin’s resilience amid these challenges is notable, but its future remains uncertain as it navigates the complex interplay of macroeconomic factors, especially Treasury yields. Investors must stay alert and adjust strategies accordingly as these conditions evolve.