Although Bitcoin (BTC) reached a peak of $73,800 almost three months ago, it is currently facing challenges in returning to that level, pausing its price discovery process. Bitcoin has shown strong performance, hovering slightly below its previous high, suggesting a typical pause in a bullish market. Nevertheless, a market analyst cautions that certain macroeconomic factors could pose a risk to Bitcoin's growth.
Crypto analyst Chang told CoinDesk that while Bitcoin remains robust, there are concerns stemming from macroeconomic factors. He highlighted the instability of bond yields caused by insufficient demand in comparison to the issuance of US Treasuries. Any adverse effects on Bitcoin are expected to be linked to yields and the dollar index.
The volatility of Treasury yields is a major consideration, influenced by worries about US debt, a growth in bond issuance, and the increase in Japanese government bond yields. Over the past fortnight, the 10-year Treasury yield surged by 24 basis points to 4.55%, as reported by TradingView data. Analysts caution that yields exceeding 4.7% might lead to volatility in the stock market.
Increased yields typically result in higher interest rates for borrowing, reducing the appeal of riskier investments such as Bitcoin and technology stocks. Chang anticipates that yields will remain unstable until June, causing Bitcoin to remain closely correlated with the performance of the stock market. At present, the two-year Treasury yield is approaching 5%. The possibility of a 5% yield on government bonds could prompt investors to shift their funds from stocks and cryptocurrencies.
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