Bitcoin Enters “Up Only Mode” as US Bond Market Crisis Boosts Crypto’s Upside Prospects

Loss of Confidence in US Policy Boosts Bitcoin’s Upside Prospects

The US 10-year Treasury yield surged above 4.59% on April 11, its highest level in two months, marking a significant shift in the US bond market. This development has led to a loss of confidence in US policy, potentially driving investors away from traditional haven assets and toward alternative stores of value, such as Bitcoin.

The $29 trillion US Treasury market has dropped more than 2% this week, its steepest decline since September 2019, when a liquidity crunch in the repo market forced the Federal Reserve to intervene.

US President Donald Trump’s unpredictable tariff announcements and reversals have fueled the chaos, with the US dollar adding to the pressure, falling below the 100 mark for the first time since 2022.

Bitcoin Rises Amid US Bond Market Rout

In contrast, Bitcoin rose by over 4.50% amid the US bond market rout, reaching around $83,250 on hopes that the weakening macroeconomic conditions will push US policymakers to act.

“It’s on like donkey kong,” wrote former BitMEX CEO Arthur Hayes in his April 11 X post, adding, “We will be getting more policy response this weekend if this keeps up. We are about to enter UP ONLY mode for $BTC.”

Target Rate Probabilities Suggest Fed Rate Cuts

Bond traders are now pricing in at least three rate cuts from the Federal Reserve by the end of the year, with a fourth becoming increasingly likely. Rate cuts have historically been bullish for Bitcoin.

Bitcoin Eyes “Parabolic Bull Run” Due to Weaker Dollar

Historically, sharp drops in the US Dollar Index have preceded delayed but powerful Bitcoin bull runs, according to crypto analyst Venturefounder.

“A falling DXY has typically been a strong bullish signal for Bitcoin,” the analyst wrote on X, pointing to a clear bearish divergence on the chart.

Conclusion

The current situation in the US bond market has created a perfect storm for Bitcoin, with a potential rate cut and a weaker dollar pushing the cryptocurrency’s upside prospects. As the market continues to evolve, it’s essential to stay informed and adjust your investment strategy accordingly.

FAQs

Why is the US bond market experiencing a crisis?

The US bond market is experiencing a crisis due to a loss of confidence in US policy, fueled by unpredictable tariff announcements and reversals by US President Donald Trump.

How has the US dollar been affected?

The US dollar has fallen below the 100 mark for the first time since 2022, adding to the pressure on the US bond market.

What is the significance of the Federal Reserve’s rate cuts?

Rate cuts have historically been bullish for Bitcoin, and bond traders are now pricing in at least three rate cuts from the Federal Reserve by the end of the year.

What is the potential impact of a weaker dollar on Bitcoin?

A weaker dollar has historically preceded delayed but powerful Bitcoin bull runs, according to crypto analyst Venturefounder.

What is the current price of Bitcoin?

The current price of Bitcoin is around $83,250.

What is the forecast for Bitcoin’s future price?

The forecast for Bitcoin’s future price is uncertain, but some analysts believe it could reach $100,000 or more if the current trends continue.