Bitcoin Pulls Back to $93,000 Amid Rising Treasury Yields
Bitcoin (BTC) started the new year positively, approaching $100,000, but has since pulled back to $93,000 following a failure to maintain gains. This downturn coincides with rising volatility in the U.S. Treasury market, where long-term yields have reached multi-month highs due to persistent inflation data.
- The yield on 10-year U.S. inflation-indexed securities has risen to 2.29%, highest since November 2023.
- Higher real yields reduce the attractiveness of risk assets like BTC, especially amid expectations for a more hawkish Federal Reserve.
- Traders are now anticipating a Fed rate cut no sooner than June.
- Market response to rising Treasury yields has negatively affected short-term crypto outlooks, according to Thomas Erdosi from CF Benchmarks.
- This yield spike is not limited to the U.S.; Japan and the U.K. are also experiencing increased long-end yields.
- Major stock indices, including Nasdaq and S&P 500, have lost their New Year gains as well.
Despite these challenges, optimism persists in BTC's Deribit-listed options market, with active call options valued at $14.87 billion, nearly double that of puts. Key points include:
- The $120,000 strike call option has a notable open interest of $1.47 billion.
- Calls at $101,000 and $110,000 also exceed $1 billion in open interest each.
- The most popular put option at $75,000 holds an open interest of $595 million.
This suggests a bullish bias among traders. Erdosi noted that market dynamics could shift by the end of January, potentially influenced by changes in the regulatory environment following President Trump's inauguration on January 20.