Bitcoin (BTC) maintained its position around $66,000 during Asian trading hours on Tuesday, as investors reacted to increasing Treasury yields and speculation over potential rate cuts by the Federal Reserve later this year.
Ethereum Remains Above $3,300, CoinDesk 20 Down 0.6%
Ether (ETH) continued to trade above $3,300, while the CoinDesk 20 (CD20) experienced a 0.6% decline, reaching 2,532 at the time of writing.
The 10-year Treasury note yield reached a two-week high of 4.40%, driven by persistent inflation concerns and strong manufacturing activity. Rising Treasury yields typically prompt a shift of capital away from risk assets like bitcoin and towards traditional safe-havens such as gold. However, gold remained resilient despite the weakness in bitcoin and the Nasdaq index.
According to Semir Gabeljic, director of capital formation at Pythagoras Investments, bitcoin’s retracement to $65,000 is largely influenced by the macro outlook on interest rates and rising Treasury yields, which tend to dampen investor risk appetite.
Speculation on Rate Cuts and Market Response
Speculation over potential rate cuts by the Federal Reserve has led to uncertainty in the market. Bettors on Polymarket are divided on whether a rate cut will occur in June, while the CME Fed Watch tool indicates a 97% chance of rates remaining unchanged after May’s meeting.
Liquidations and Market Volatility
Over $245 million in long positions have been liquidated in the past 24 hours, with $60 million in BTC positions facing significant losses. The decrease in perpetual futures funding rates and global futures open interest suggests that some leveraged long positions have been closed.
Jun-Young Heo, a Derivatives Trader at Presto, noted that recent stagnation in bitcoin ETF inflows and market prices falling below the 20-day moving average may have prompted some trend followers to view yesterday’s downturn as the end of a two-month-long rally.
Despite the challenges posed by rising Treasury yields and rate cut speculation, the cryptocurrency market continues to exhibit resilience amidst evolving market dynamics.
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