Bitcoin price continued consolidating as investors focused on the rising short-term bond yields. The BTC/GBP pair was trading at 19,541 on Thursday morning, a few points lower than last month’s high of 21,000. In the same period, the BTC/USD pair wavered at the 23,000 level. ETH/GBP is hovering at 1,400, lower than last month’s high of 1,450.
UK bond yields rise
The BTC to GBP price was in a tight range as investors focused on the bond market. Bond yields have risen substantially in the past few months. In the United States, the 10-year Treasury yield has moved close to 4%, the highest point since last year. Further, 2-year Treasuries have moved close to 5%, meaning that the yield curve is highly inverted.
The situation is better in the UK, where the two-year bond yield stands at 3.6% while the 10-year has moved to 3.8%. Still, these yields are at their highest levels in months. The main reason for their elevated pricing is the fact that central banks have maintained their hawkish tones.
On Wednesday, the Bank of England (BoE) governor said that the bank was nearing its hiking cycle. Nonetheless, he warned that the bank will not hesitate to tighten its screws in a bid to push inflation to its two-year target.
Bitcoin price tends to underperform in periods of high-interest rates as we experienced in 2022. With bond yields, especially in the US rising, it means that people can earn a 5% return risk-free. While this yield is negligible, it is substantially high for large institutional investors.
March will be an important month for BTC since the Federal Reserve, European Central Bank (ECB), and Bank of England (BoE) will have a meeting. Analysts expect that these banks will maintain their rate hikes since inflation remains at an elevated level.
BTC/GBP forecast
The 4H chart shows that the BTC/GBP price has been in a consolidation phase in the past few days. In this period, it is hovering slightly below the 20,000 resistance level. It is also trading at the 25-day and 50-day moving averages. A look at oscillators shows that the MACD and signal line have formed a bullish divergence while the Relative Strength Index (RSI) has moved slightly below the neutral point at 50.
Therefore, the BTC to GBP price will likely remain in this range and then have a bearish breakout as sellers target the ascending trendline shown in black at 18,000. A move above 20,500 will invalidate the bearish view.
Source: https://invezz.com/news/2023/03/02/bitcoin-btc-gbp-outlook-as-boe-rate-hikes-peak/