Veteran Analyst "Bitcoin Explodes When Treasury Yields Rise"...Diagnoses Start of Major Rally

▲ Bitcoin (BTC)

An analysis suggests that Bitcoin (BTC) has shown a significant upward trend every time US 10-year Treasury yields have risen. While a rise in long-term Treasury yields is typically interpreted as a factor suppressing risk asset investment sentiment, Bitcoin's past movements have shown strong price increases coinciding with periods of expansion.

According to The Crypto Basic on May 20 (local time), veteran market analyst Sykodelic stated that the correlation between US 10-year Treasury yields and Bitcoin is often misunderstood in the market. He analyzed that Bitcoin's biggest price movements have historically coincided with periods of rising US 10-year Treasury yields, indicating a phase of expansion rather than a market top.

Sykodelic explained that a favorable environment for risk assets like Bitcoin is created when Treasury yields rise simultaneously with periods of economic expansion. Economic expansion is characterized by increases in production, GDP, and employment, stimulating investment growth. He believes that if the rise in US 10-year Treasury yields and economic expansion coincide again, Bitcoin could enter a new phase of expansion.

Past examples were also presented. From January 2013 to January 2014, US 10-year Treasury yields rose from 1.75% to 3.04%, and during the same period, Bitcoin surged from $13.5 to $1,240 before experiencing a significant correction. From November 2016 to November 2018, Treasury yields increased from 1.82% to 3.25%, and Bitcoin skyrocketed by 2,740% from $697 to $19,800.

A similar pattern emerged from July 2020 to October 2023. US 10-year Treasury yields jumped from 0.65% to 5.02%, and Bitcoin rose from $9,135 to $35,194. In this process, Bitcoin peaked at $69,000 in November 2021.

Sykodelic assessed that a new phase began in March of this year. During this period, US 10-year Treasury yields rose from 3.93% to 4.65%, and Bitcoin increased by more than 11%. The Crypto Basic reported that Bitcoin is currently trading at $77,240, down 4.7% over the past 7 days, and failed to break above $82,000 last week amid renewed inflation concerns and geopolitical tensions.

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