Bitcoin (BTC) is facing increased selling pressure, recently dropping below the critical $69,000 mark as US Treasury yields reach a three-month high of 4.2%. This situation raises concerns about inflation and may significantly influence Bitcoin’s price trajectory in the coming days.
Current Market Context
The BTC price action is closely tied to developments in the US Treasury market. Following the Federal Open Market Committee (FOMC) meeting, Bitcoin experienced an 18% gain, bolstered by Fed Chair Jerome Powell’s indication that interest rate cuts are on the horizon. However, the recent spike in Treasury yields suggests a contrasting narrative.
On October 22, the US 10-Year Treasury Yield rose to 4.2%, marking its highest level since July. This increase is indicative of investors’ expectations for higher long-term interest rates, raising concerns about inflation despite the Fed’s recent rate cuts. As yields climb, the potential for inflation risks becomes more pronounced, creating uncertainty in the crypto market.
Key Levels to Watch
For Bitcoin to maintain its bullish momentum, analysts believe it must establish a breakout above $69,000 by midweek. Crypto analyst Skew emphasizes that this higher high is crucial for demonstrating the market’s strength. “If this market is truly robust, the price should make a higher high around midweek above $69K,” Skew noted.
Currently, Bitcoin is trading at approximately $67,033, reflecting a 0.74% decline and a market capitalization of $1.325 trillion. Should BTC fail to maintain upward momentum, the $65,000 level is seen as a critical support zone, according to technical analyses. This level aligns with several short-term exponential moving averages (EMAs), suggesting that a failure to hold this zone could lead to further declines.
Impact of Upcoming US Elections
Adding to the market’s complexity is the upcoming US elections, with increasing speculation regarding former President Donald Trump’s potential return to power. Analysts from 10x Research indicate that Trump’s growing lead over Kamala Harris in prediction markets could influence Federal Reserve policy. Should Trump’s pro-growth economic policies gain traction, there might be a pause in rate cuts, further impacting market sentiment.
The intertwining of these macroeconomic factors highlights the fragility of Bitcoin’s current position. The interplay between rising Treasury yields, inflation expectations, and political developments could create a challenging environment for crypto assets in the short term.
Commodities Rally and Future Predictions
While Bitcoin faces headwinds, other markets, such as gold and silver, are flourishing, hitting multi-year highs. Some market analysts predict that if Bitcoin follows a similar trajectory to gold, its price could surge dramatically—potentially reaching as high as $230,000.
In conclusion, Bitcoin’s next move hinges on its ability to reclaim the $69,000 level amidst rising US Treasury yields and the evolving political landscape. Investors will need to closely monitor these developments, as they could have significant implications for Bitcoin’s price trajectory in the near future.
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