Key Insights:
- Bitcoin price risks falling amid rising long-term Treasury yields due to fiscal concerns.
- 30-year US Treasury yield just hit 5% and Japan’s 30-year Government Bond yield reaching another ATH, keeping trades off risk assets.
- Gold decouples from Bitcoin and climbed above $3,600, targeting $4,000.
This coincided with Japan’s 30-year Government Bond yield reaching another ATH.
Bitcoin price is on a slow recovery path but headwinds keep appearing for the largest crypto asset. The rising U.S. Treasury yields, surging Japan’s 30-year Government Bond yield, and gold hitting another all-time high (ATH) risk a fall in Bitcoin price.
Meanwhile, other headwinds such as inflation concerns continue to exist as traders eye the September 17 Fed rate decision for further cues on market direction.
US and Japan Treasury Yields’ Rise Raise Concerns
Rising long-dated yields in both the U.S and Japan raised concerns among investors, easing demand for risk assets.
The 10-year US Treasury yield advanced above 4.295% on September 3. Additionally, the 30-year US Treasury yield just hit 5% amid fiscal concerns, according to CNBC data.
This coincided with Japan’s 30-year Government Bond yield reaching another ATH, rising 8.5 basis points to 3.285%. This could be the beginning of the global deficit spending crisis, as per The Kobeissi Letter.
Also, economist Peter Schiff said yields on the 30-year U.S. Treasury will soon rise above 5%. This happens as the Fed intends to cut rates in September and the coming months.
At the time of writing, the CME FedWatch Tool showed a 92% probability of a Fed rate cut by 25 bps on September 17. Also, traders expect two rate cuts this year as odds rise amid Fed Chair Jerome Powell’s latest dovish comments.
Typically, Bitcoin price moves in the opposite direction to US treasury yields. Moreover, rising bonds yields will prompt the Bank of Japan to implement measures, including raise interest rates.
This would trigger a broader sentiment to unwind Yen carry trades, causing Bitcoin price to crash below $100K. The September-October bull market peak jitters already impacted upside momentum in Bitcoin price.
Gold Price Targets $4,000
Gold price hit a new ATH above $3,600 on Wednesday amid concerns over tariffs, rising treasury yields, and debt crisis. In 2 years, gold rallied more than 100%, even outperforming Bitcoin this year.
The correlation between gold and Bitcoin are gradually diverging, making investors bet in gold over Bitcoin amid market uncertainty.
Notably, Bitcoin’s 30-day, 90-day, and 365-day correlation with gold continues to decline, according to Glassnode. Also, gold futures are climbing again after the U.S. Court of Appeals for the Federal Circuit ruled that Trump exceeded his executive authority when imposing the tariffs.
Gold price targets $4,000 amid massive demand due to volatility and uncertainty ahead of Fed rate cuts, predicted crypto market research firm Matrixport.
The firm added that the rally comes amid muted money printing and rising federal debt. Bitcoin remains in consolidation, but its long-term outlook stays extremely bullish.
As headwinds such as macroeconomic impacts, Bitcoin’s historical peak and crypto seasonality jitters erased bullish sentiments, a Fed rate cut in September could bring crypto market recovery.
Investors now turn their attention to the US JOLTS Job Openings and the Fed Beige Book due later today for fresh signals. The August payrolls report on Friday, alongside unemployment and private hiring figures are also awaited.
At the time of writing, BTC price was trading above $111K, up nearly 1% in the last 24 hours. The 24-hour low and high were $108,454 and $111,782, respectively.