Bitcoin holds above $65,000 following weekend price rebound.
Rising inflation expectations and bearish long-term bond yields have stablized investors’ appetite for safe-haven assets.
Lower real yields have also contributed to Bitcoin’s demand as a speculative hedge, promising further upsides.
Meanwhile, technical outlook anticipates another record high for the flagship cryptocurrency.
NEW DELHI (CoinChapter.com) — Last week was great for Bitcoin (BTC) as it rallied towards another record high, hitting $69,000 for the first time in history before turning lower on profit-taking sentiment. Nonetheless, it closed the week at over 3.5% higher and reclaimed $65,000 as a psychological support level.
Bitcoin meets real yields
The bulk of gains emerged in the days approaching the release of the U.S. consumer price index (CPI) report for October. Published Wednesday, the report highlighted higher inflationary pressures in the U.S. since 1990. Bitcoin’s gains also appeared in the line of further rising expectations of higher consumer prices, which outpaced nominal long-term yields, thus pushing the real yields lower.
Daily Treasury Real Yield Curve Rates. Source: U.S. Treasury
If the U.S. real yields stay lower, it could create an ideal hotbed for the next Bitcoin bull run in the coming sessions.
Meanwhile, the Federal Reserve expects to unwind its $120 billion a month asset purchasing program later in November to tame inflationary pressures. While the central bank’s decision may assist the real yields in rebounding higher, few analysts see them jumping from negative to above zero.
Gargi Chaudhuri, head of iShares investment strategy at Blackrock, a financial giant with a history of trading Bitcoin Futures, noted that rising real yields would have minimal impact on the already-rallying risk-on markets, such as the U.S. stocks.
Meanwhile, Meghan Swiber, rates strategist at Bank of America, said 10-year real yields could stay below zero across the next decade. Analysts at Morgan Stanley shared a similar forecast earlier this year.
The 10-year real yields, also called Treasury Inflation Protects Securities (TIPS), have been negative across 2021. While it rose in the first quarter, a sharp pullback in the next sessions saw it falling to a new low of 1.24% below zero. Nonetheless, the nominal 10-year yield has jumped 65 basis points this year.
What’s happening this week
The turn through mid-November would also see more inflation data from the G10 economies, which may report increases in consumer prices in October. That leaves Bitcoin in a bullish state against foreign currencies like the pound, euro, and the Japanese yen.
Meanwhile, the cryptocurrency could also react to speeches from various U.S. Federal Reserve and the European Central Bank policymakers that would again attempt to calm down fears surrounding the rising inflation, which may push the real yields further lower.
On Tuesday, the U.K. will release its September unemployment rate and the August employment change figures. The U.S. would also publish its retail sales data to show consumer sentiment among rising inflationary pressures.
On Wednesday, Bitcoin could show some volatile price moves thanks to a trio of inflation reports coming out of the U.K., the eurozone, and Canada.
On Thursday, Japan will also release its inflation data but expects to have a little impact on the Bitcoin market due to yen’s limited influence on cryptos.
BTC technical outlook
Bitcoin broke out of its Bull Pennant structure last week but now awaits confirmation for an extended upside move. Meanwhile, the cryptocurrency stays in an Ascending Flag range, providing traders with a conflicted interim outlook — they have been increasing long exposure near the Flag support and short exposure near the Flag resistance.
Meanwhile, a strong retest of the confluence could result in a pullback towards the Flag’s resistance trendline, a new all-time high. A decisive continuation would bring the Pennant’s upside target near $88,000 under consideration.
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.
UAE-based airline giant Emirates to accept Bitcoin - BTC- payments. The airlines will also launch Metaverse and NFT collection....
Our Partners
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.