Crypto News

Bitcoin Turns Jittery After Breaching $52,000; Bond Yields Rise

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT
NEW YORK CITY – FEB 3: Wall Street road sign and New York Stock Exchange during United States economy recovery, February 3, 2010 in Manhattan, New York City.

Bitcoin opened with a mixed bias in New York this Wednesday as traders wobbled between optimistic endorsements from mainstream firms and fears of government bonds sell-off.

The benchmark cryptocurrency rose by up to 9.35 percent during the Asian and European session, hitting an intraday high of $52,666 on Coinbase, a US-based crypto exchange. But it pared a portion of its gains entering the US trade hours, dropping 1.85 percent to test support near $50,000.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT
Bitcoin plunges into the US session. Source: BTCUSD on TradingView.com

The yield on the US 10-year Treasury note surged to 1.48 percent from 1.313 percent on Tuesday as bond sell-off resumed after a shaky session on Tuesday. Yields rise when bond prices fall.

Major risky assets have plunged in recent days, wobbling between losses and gains. Many analysts have expressed worries that additional stimulus measures from President Joe Biden’s administration would lead to a spike in inflation and erode the value of investors’ bond returns.

Concerns about inflation have also prompted bets that the Federal Reserve will boost interest rates in the next two years.

Bitcoin in Bias-Conflict

Investors in the Bitcoin space have not received the prospect of rate hikes well, given the cryptocurrency’s overly bullish performance against the near-zero interest rates in the previous 12 months. The cryptocurrency fell by more than 21 percent last week against the rising bond yields.

Bitcoin retained its upside momentum on Monday as bond sell-off cooled off, only to pare the gains in the next session Tuesday. It picked up on its bullish bias again after Federal Reserve Gov. Lael Brainard clarified that the Fed would not raise rates unless the US economy achieves maximum employment and inflation rate above 2 percent.

“I would be concerned if I saw disorderly conditions or persistent tightening in financial conditions that could slow progress,” she said.

The BTC/USD exchange rate jumped over $52,000 after Ms. Brainard’s comments, its jump further propelled higher by optimistic endorsements for cryptocurrencies from Citibank and Goldman Sachs.

Technically, the Wednesday correction in the Bitcoin market started in the area that in mid-February held bulls from extending their upside bias. The range is between $50,645 and $52,368. Nonetheless, bulls were able to break bullish above it to eventually log a record high at $58,367.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT
Bitcoin consolidates after entering the mid-Fed resistance range. Source: BTCUSD on TradingView.com

From here, breaking below the resistance range could prompt traders to test $49,000 as their short-term downside target. A further breakdown risks sending prices to mid-$40,000s.

How useful was this post?

Click on a star to rate it!

Yashu Gola

Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2014 – and has contributed to several cryptocurrency media outlets, including CoinChapter, NewsBTC, FxDailyReport, Bitcoinist, and CCN. Academically, Yashu holds a bachelor's in information technology, with majors in data structures and C++ programming language. He has also won the 'Atulya Award' for his efforts towards raising $100,000 for an India-based farming project.

Related "Bitcoin" News

Survey Shows 10% Of Fund Managers Believe Bitcoin Will Outperform In 2021
Long Beach (CoinChapter): Bank of America’s latest Global Fund Manager Survey provides an interesting look into how investors view...
Another Big, Bullish, Blasting Price Rally Awaits Bitcoin; Here’s Why
Yerevan (CoinChapter.com) — Bitcoin looks to capitalize further on Coinbase’s latest foray into Wall Street even as the cryptocurrency already...
Bitcoin Between March 2020 and April 2021: What Pumped the Token By 1,500%
The benchmark cryptocurrency added $4,024, or 6.74 percent, to reach a new record high of $63,774. Its move upside...
Bitcoin Holds Steady Above $60,000; Could It Hit $65,000 on Coinbase News?
Bitcoin (BTC) cautiously climbed above $60,000-benchmark during the weekend session and continues to hold the level as interim support...
Bitcoin Weekly Analysis: Is An $80,000 BTC Possible?
Bitcoin bears should brace for an impact as a technical indicator plan to send the flagship cryptocurrency to its...
HSBC Bars Customer from Buying/Selling Bitcoin-Friendly MicroStrategy Stock
The European banking giant, notorious for laundering money for drug kingpins and Ponzi schemers, told one of his clients...