Bitcoin bond yields pressure Bitcoin’s next major move. Treasury yields surged to their highest level in 24 years. Consequently, government bonds look more attractive to investors. Therefore, cryptocurrencies face fresh pressure.
According to Bitunix’s October market analysis, the 10-year US Treasury yield climbed above 5.35%. Bitcoin fell below $82,000. Meanwhile, selling spread across the wider crypto market.
The exchange warns that continued pressure from high bond yields could make a sustained crypto recovery difficult.
Why Bitcoin bond yields threaten crypto
The US government backs Treasury bonds. They offer regular interest payments. When yields rise, investors earn higher returns. Additionally, they avoid the same risks tied to cryptocurrencies.
Bitcoin pays no fixed interest. As a result, higher Treasury yields can pull capital into government bonds. Investors may also hold cash instead.
Bitunix argues this shift in investor preferences creates additional pressure. It affects Bitcoin and other speculative assets.
The risk extends beyond crypto. Higher yields also increase borrowing costs. Furthermore, they can reduce the appeal of technology stocks. Bitunix reported weekly declines in crypto-linked equities. These included Strategy and Circle.
However, the direction of bond yields remains critical. A sustained decline could improve risk appetite. That could help Bitcoin recover.
Crypto market weakness goes beyond Bitcoin
The broader crypto market suffered heavier losses during October 3–9. Bitcoin declined 3.80%. Meanwhile, Ethereum lost 8.39%. XRP fell 7.09%.
More importantly, only around 20% of the top 300 cryptocurrencies recorded gains. Their median weekly return was -5.18%.
Decentralized finance tokens also struggled. Uniswap’s UNI declined 18.37%. Meanwhile, PancakeSwap’s CAKE lost 15.92%.
The Sandbox’s SAND rallied 57.71%. Nevertheless, Bitunix found little evidence of improving project fundamentals. The exchange attributed the move primarily to trading sentiment and capital flows. It could not establish the precise drivers.
Meanwhile, commodities followed a different path. Gold returned to $4,200. Additionally, Brent crude climbed above $100 per barrel.
October 14 inflation report could decide Bitcoin’s direction
The next major test comes on October 14. The US releases September’s Consumer Price Index (CPI). Bitunix cites an expected annual inflation rate of 3.6%. That is up from the previous 3.4%.
Higher-than-expected inflation could strengthen expectations for elevated Fed rates. Consequently, Treasury yields could rise further. That would create additional selling pressure on Bitcoin and other risk assets.
Conversely, softer inflation could ease pressure on bond yields. That could support a crypto recovery.
For traders, the key signal will be how Treasury yields react to the CPI data.