Bitcoin (BTC) 'Withstands' Soaring US Treasury Yields...Q4's Crucial Test

▲ Bitcoin (BTC)

Bitcoin (BTC) defended the $83,000 mark amidst surging US Treasury yields and macroeconomic instability. At the same time, it stands at a critical juncture, poised to potentially break the Q4 jinx of a midterm election year, which typically shows weakness.

Veteran trader Benjamin Cowen, in a video uploaded to his YouTube channel on October 1 (local time), pointed to the current situation where Bitcoin is trading between $83,000 and $84,000, identifying the $83,000 mark as a key watershed that will determine its future direction. Cowen admitted, "I didn't expect the breakthrough of $83,000," and analyzed, "Historically, Bitcoin has experienced a downturn in the fourth quarter of midterm election years, but this time it is showing a different trend by setting higher highs and forming the $83,000 support level."

Cowen explained that the biggest issue is whether this rise is a true breakout or a major trap before a typical Q4 bear market. He stated, "If the $83,000 level is given up, it could trap breakout buyers, similar to 2015 or 2020, leading to a sharp market reversal." However, he added, "If it withstands rising Treasury yields and maintains $83,000, the bullish scenario will continue." He explained that as long as $83,000 does not collapse, the market's independent upward trend should be acknowledged, regardless of the midterm election cycle pattern.

The unusual trend in the bond market and the confusion in macroeconomic indicators were also pointed out. Cowen analyzed that although the recent Personal Consumption Expenditures (PCE) price index was 3.4%, below the expected 3.8%, and core PCE also slowed to 3%, it is difficult to see this as a real slowdown due to changes in statistical calculation methods, making it identical to the revised figure from the previous month. As a result, with the Federal Reserve's (Fed) probability of a rate hike in October decreasing, the bond market is raising 30-year and 10-year Treasury yields, fearing a failure to control inflation.

As small and mid-cap stocks face pressure, with the interest-rate-sensitive Russell 2000 index falling by 8%, the key question is whether Bitcoin can withstand the growth slowdown shock that may occur in the latter half of the interest rate hike period. Cowen reminded that in the past, Bitcoin held up during the interest rate hike phase itself but experienced a full-fledged bear market when Treasury yields peaked and then turned downwards amidst concerns of an economic slowdown.

Amidst the clash between traditional cyclical theories and macroeconomic instability, Bitcoin is engaged in a fierce battle at the $83,000 defense line. Whether the $83,000 support holds is acting as the final test that will determine a further rally or a sharp liquidation phase in the upcoming fourth quarter.

[Article Summary]

-Benjamin Cowen analyzed that Bitcoin (BTC) must defend the $83,000 level to continue its upward momentum in Q4.

-Amid distorted inflation indicators and expectations of the Fed's interest rate freeze, Treasury yields are soaring, and market shocks centered on small and mid-cap stocks are spreading.

-He warned that if $83,000 cannot be maintained, breakout buyers could be trapped, leading to a sharp downside reversal.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*