• The article discusses the current state of the Bitcoin (BTC) market, which has been in a flat trading pattern since falling 5% on Friday.
• Analysts are now looking to U.S. Treasury yields for fresh cues, as a further rise in bond yields could lead to a sell-off of riskier assets like cryptocurrencies and technology stocks.
• QCP Capital warned that crypto prices might struggle to maintain current levels if equities continue to fall and the dollar index and yields continue to move higher.
Bitcoin Market Struggles Amid Yield Uncertainty
The Bitcoin (BTC) market has been trading dead flat since falling by 5% early Friday, leaving analysts looking towards U.S. Treasury yields for clues on future direction. BTC is currently hovering around $22,150 – $22,700, according to CoinDesk data.
Rise in Bond Yields Could Lead To Crypto Sell-Off
If Treasury yields extend their February rally, this could cause a sell-off of riskier assets like cryptocurrencies and technology stocks as well as inflation hedges like gold. This is because rising bond yields make borrowing more expensive and typically cause traders to ditch risky assets such as cryptos in favor of fixed income securities instead; something witnessed last year due to similar circumstances.
QCP Capital’s Warning
Singapore-based QCP Capital warned that if equities continue to fall and the dollar index and yields continue moving higher, crypto prices might not be able to sustain current levels: “Despite the gloom and doom, crypto continues to hold up extremely well, with BTC staying above $23,000,“ they said in their research note published on Friday.
Yields Pull Back Slightly
Fortunately however, Treasury yields have started pulling back slightly after posting a sharp increase earlier this week; easing some of the pressure off investors who were concerned about further yield rises leading to an eventual drop off in risky asset prices such as cryptocurrency valuations..
In conclusion then; while it remains uncertain whether or not bond yields will grow further over time leading eventually lead an overall trend towards dropping crypto values – it appears that any immediate threat from such seems unlikely given recent yield pullbacks seen this week .