Bitcoin has experienced a notable surge of over 4.5% this week, trading around $83,250 amid growing speculation that the Federal Reserve may cut interest rates later in the year. This rally occurs as the U.S. Treasury bond market undergoes its steepest sell-off since 2019, creating ripples throughout traditional financial systems.
Bond Market Turmoil Fuels Fed Rate Cut Bets
On April 11, the yield on the benchmark 10-year U.S. Treasury spiked above 4.59%, marking a two-month high. This sharp move contributed to a more than 2% plunge in Treasury bond prices, the biggest drop in nearly five years. These losses reflect increasing investor belief that the economic instability could prompt the Federal Reserve to ease monetary policy. Currently, futures markets are predicting:
- At least three rate cuts by the end of 2024
- A fourth cut is becoming more probable amid market stress
Bitcoin as a Safe Haven Asset
Bitcoin’s rise highlights its role as an alternative, macro-sensitive asset. As traditional markets falter, Bitcoin is increasingly viewed as a hedge against risks such as:
- Central bank policy uncertainty
- Currency debasement
- Inflationary pressures
The weakening of the U.S. dollar has further fueled Bitcoin’s bullish momentum. The U.S. Dollar Index has dipped below the 100 mark for the first time since 2022, recording its worst weekly performance in over two years.
Technical Outlook
Market analysts suggest Bitcoin’s technical charts signal more upside potential. If current macroeconomic conditions persist, Bitcoin could be poised for a rally toward the significant psychological level of $100,000.
These developments emphasize how Bitcoin is becoming increasingly reactive to traditional market shifts and central bank cues, shedding its image as a fringe investment and evolving into a core macroeconomic asset.
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