Key Points
- Bitcoin (BTC) demonstrates robust performance despite potential macroeconomic threats.
- Treasury yield volatility and rising bond yields could impact Bitcoin and other risky assets.
Despite potential macroeconomic risks, Bitcoin (BTC) continues to display resilience, maintaining a price just below its record highs.
This trend is typical of a pause in a bull market.
However, certain macroeconomic factors could pose threats to Bitcoin’s growth, according to a renowned market analyst.
Macroeconomic Factors and Bitcoin
“Bitcoin is robust, but macro factors are posing threats,” said crypto analyst Chang.
He noted that bond yields are unstable due to weak demand compared to US Treasuries issuance.
If Bitcoin is negatively impacted, it will likely be due to yields and the dollar index.
Treasury yield volatility, driven by US debt concerns, increased bond supply, and a rise in Japanese government bond yields, is a key factor.
In the past fortnight, the yield on the 10-year Treasury has risen 24 basis points to 4.55%, according to TradingView data.
Analysts warn that yields exceeding 4.7% could trigger stock market volatility.
Higher yields often lead to increased borrowing costs for individuals and businesses, making riskier assets like Bitcoin and tech stocks less appealing.
Chang predicts that yields will remain volatile through June, maintaining a close correlation between Bitcoin and stock markets.
Impact of Rising Treasury Yields
Currently, the two-year Treasury yield is close to 5%.
The potential of a 5% return on government bonds, seen as safe investments, might prompt macro traders to move their funds away from stocks, cryptocurrencies, and other high-risk sectors.
Peter Oppenheimer, head of Macro Research at Goldman Sachs, stated, “We’re now at a level of bond yields where rising yields from here are really going to weigh on all asset classes.”
In light of this, traders are closely watching the personal-consumption expenditures (PCE) price index, a key indicator for Federal Reserve interest rate decisions.
The PCE data, which the Fed uses for inflation measurement, is due for release on Friday.
Bitcoin’s Struggle at $69,000 Resistance
As we approach the end of May, Bitcoin (BTC) continues to make positive gains but struggles to breach and maintain new highs.
Despite reaching an all-time high of $73,800 nearly three months ago, BTC still needs to revisit these levels, indicating a pause in its price discovery phase.
Keith Alan, co-founder of trading resource Material Indicators, emphasized 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 said, suggesting that turning this resistance into support is crucial for further price advances.
