Bitcoin Approaches ‘Golden Cross’ Amid Unfounded Fears of Rising Treasury Yields
Bitcoin (BTC) is nearing a ‘golden cross,’ indicating a potential bullish trend despite worries about rising U.S. Treasury yields. Analysts from TS Lombard argue that these concerns may be exaggerated, showing that the recent increases in yields do not necessarily signal a bearish outlook for risk assets like cryptocurrencies. Bitcoin’s price struggles, previously near $70,000, suggest a complex relationship between Treasury yields, risk asset appeal, and potential Federal Reserve policy actions.
Bitcoin is approaching a crucial technical indicator known as the ‘golden cross,’ despite prevailing anxieties regarding the rise in U.S. Treasury yields. According to TS Lombard, a London-based macroeconomic research firm, such concerns may be exaggerated. They argue that the increase in Treasury yields is not indicative of a bearish trend for riskier assets like cryptocurrencies. Bitcoin has recently struggled to breach the $70,000 mark, sparking speculation about a potential decline tied to the ascent of U.S. Treasury yields. However, the current trajectory suggests a bullish outlook, with analysts noting that a golden cross is imminent on Bitcoin’s daily chart. On Monday, the yield on the U.S. 10-year note rose above its 200-day moving average, reaching a three-month high of 4.26%. This uptick in yields has been attributed in part to the Federal Reserve cutting rates by 50 basis points earlier this month. As yields on safer assets increase, they often draw investments away from riskier options, including Bitcoin; subsequent to hitting nearly $70,000, Bitcoin’s valuation has dipped to $67,000. Some analysts draw parallels between the current environment and historical examples of misjudged policy decisions by the Fed. Nonetheless, Dario Perkins, managing director at TS Lombard, states that the notion of a policy error is misplaced and that the current rate cuts are part of a deliberate strategy. Perkins suggests that recent increases in yields are consistent with prior non-recessionary rate cuts, signaling that the current atmosphere should not necessarily lead to a substantial outflow of funds from risk assets into Treasury bonds. In contrast to fears stemming from inflation reports and job growth data, he contends that the Federal Reserve’s capacity to cut rates remains intact without reigniting inflation. Moreover, Bitcoin is poised for bullish momentum, as indicated by its short-term moving average crossing above the long-term moving average in what is known as a golden crossover. Historically, such occurrences often precede significant price increases. Past performances, such as those observed following the golden crosses in 2020, suggest that investors may experience substantial returns following this pattern. In conclusion, while tension surrounding rising Treasury yields and potential Fed missteps persists, analysis indicates that Bitcoin’s prospects remain optimistic, particularly with the impending golden cross. The market sentiment could reflect resilience in risk assets rather than outright pessimism. It is essential for investors to remain vigilant and informed as market conditions evolve, and they may want to consider both historical trends and expert insights when making investment decisions.
The concerns surrounding rising U.S. Treasury yields have prompted various analysts to reassess the potential impact on risk assets, particularly cryptocurrencies such as Bitcoin. Higher Treasury yields typically attract investment away from riskier assets, as bonds become more appealing. Interest rates set by the Federal Reserve and their implications on economic growth and inflation are central to understanding these dynamics. TS Lombard’s insights suggest that current conditions may not be as detrimental to Bitcoin as some fear; their analysis of historical rates and employment conditions further contextualizes the discussion regarding the Fed’s policy actions. The concept of a ‘golden cross’ in technical analysis serves as a critical indicator for traders, highlighting periods of potential upward price momentum for Bitcoin.
In summary, Bitcoin’s imminent golden cross suggests a bullish trend for the cryptocurrency, despite recent fluctuations and the rise in U.S. Treasury yields. The analysis provided by TS Lombard indicates that fears regarding a policy misstep by the Federal Reserve may be overstated and not indicative of adverse effects on risk assets. Investors should consider these insights alongside historical performance trends as they navigate the evolving financial landscape. The current conditions may present opportunities for growth in Bitcoin values, particularly in light of technical indicators that have historically preceded substantial gains.
Original Source: www.coindesk.com
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